The following information is available for Ethtridge Manufacturing Company for the month ending July 31: Cost of direct materials used in production...........$1,150,000 Direct labor.....................................................966,000 Work in process inventory, July 1..........................316,400 Work in process inventory, July 31........................355,500 Total factory overhead.......................................490,500 Determine Ethtridge s cost of goods manufactured for the month ended July 31.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The following information is available for Ethtridge Manufacturing Company for the month ending July 31: Cost of direct materials used in production...........$1,150,000 Direct labor.....................................................966,000 Work in process inventory, July 1..........................316,400 Work in process inventory, July 31........................355,500 Total factory
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