Zulfiqar Corporation has provided data concerning its operations for September. The beginning balance in the raw materials account was Rs. 30,000 and the ending balance was Rs. 35,000. Raw materials purchases during the month totaled Rs. 85,000. Manufacturing overhead cost incurred during the month was Rs. 64,000, of which Rs. 5,000 consisted of raw materials classified as indirect materials. The direct materials cost for September was:
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.
Question 9
Zulfiqar Corporation has provided data concerning its operations for September. The beginning balance in the raw materials account was Rs. 30,000 and the ending balance was Rs. 35,000. Raw materials purchases during the month totaled Rs. 85,000.
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