The overhead variance for the current period is $40,000 underapplied, and the amount is material. Materials inventory $20,000 Work-in-process inventory $30,000 Finished goods inventory. $20,000 Cost of goods sold $50,000 The entry to adjust for the overhead variance would include. Is it a credit to work-in-process inventory for $10,000 or $12,000?
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
Materials inventory $20,000
Work-in-process inventory $30,000
Finished goods inventory. $20,000
Cost of goods sold $50,000
The entry to adjust for the overhead variance would include.
Is it a credit to work-in-process inventory for $10,000 or $12,000? Thanks!
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