The per-unit production costs for a product is as follows: $15 direct materials; $10 direct labour; $5 variable overhead. In addition, there is a $20,000 fixed overhead per week. Period costs are $10 variable selling costs per unit, and $40,000 fixed selling and administrative costs per week. The break-even point for the week was 3,000 units. What was the selling price used? 1) $60 2) $40 3) $20 4) None of the listed choices are correct
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 per-unit production costs for a product is as follows:
$15 direct materials;
$10 direct labour;
$5 variable overhead.
In addition, there is a $20,000 fixed overhead per week. Period costs are $10 variable selling costs per unit, and $40,000 fixed selling and administrative costs per week. The break-even point for the week was 3,000 units. What was the selling price used?
1)
$60
2)
$40
3)
$20
4)
None of the listed choices are correct
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