The following selected information pertains to Text Company, Direct materials, P62,500, indirect materials, P12,500; factory payroll, P75,000 of direct labor and P11,250 of infirect labor, and other factory overhead incurred P37,500. The total conversion cost was

The following selected information pertains to Text Company, Direct materials, P62,500, indirect materials, P12,500; factory payroll, P75,000 of direct labor and P11,250 of infirect labor, and other factory overhead incurred P37,500. The total conversion cost was

Name: The following selected information pertains to Text Company, Direct ma
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Description: The following selected information pertains to Text Company, Direct materials, P62,500, indirect materials, P12,500; factory payroll, P75,000 of direct labor and P11,250 of infirect labor, and other factory overhead incurred P37,500. The total conver

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

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Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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