Under FIFO, how much is the cost of the work in process at the beginning?
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.
Consider the following data. Department B of Ethel Manufacturing Corp. suffers an average of evaporation loss of 10%. The following data were obtained for the month of October, 2019:
Units:
In process, October 1 (2/5 completed) 9,600 gallons
Received from Department A 30,000 gallons
Finished and transferred 25,200 gallons
In process, October 31 (1/4 complete) 11,700 gallons
Costs:
In process beginning P5,760
Received from Department A 30,000
Current costs
Materials 19,440
Labor 7,290
Under FIFO, how much is the cost of the work in process at the beginning?
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