A company manufactures a single product for which the following data based on a budgeted capacity of 80,000 units per month, are as follows: Stock, output and sales data (in units) Details January Sales 72,000 Closing stock 2,000 Production 70,000 Cost Data Per unit Details $ Direct materials 10 Direct labour 15 Variable Production overheads 25 Fixed Production overheads 30 Fixed administrative and selling overheads were estimated at $350,000 and $250,000 respectively. During the month, the company sold one unit of its product for $200. Marginal Cost per unit is:
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.
A company manufactures a single product for which the following data based on a budgeted capacity of 80,000 units per month, are as follows:
Stock, output and sales data (in units)
|
Details |
January |
|
Sales |
72,000 |
|
Closing stock |
2,000 |
|
Production |
70,000 |
Cost Data Per unit
|
Details |
$ |
|
Direct materials |
10 |
|
Direct labour |
15 |
|
Variable Production |
25 |
|
Fixed Production overheads |
30 |
Fixed administrative and selling overheads were estimated at $350,000 and $250,000 respectively. During the month, the company sold one unit of its product for $200.
Marginal Cost per unit is:
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A company manufactures a single product for which the following data based on a budgeted capacity of 80,000 units per month, are as follows:
Stock, output and sales data (in units)
|
Details |
January |
|
Sales |
72,000 |
|
Closing stock |
2,000 |
|
Production |
70,000 |
Cost Data Per unit
|
Details |
$ |
|
Direct materials |
10 |
|
Direct labour |
15 |
|
Variable Production overheads |
25 |
|
Fixed Production overheads |
30 |
Fixed administrative and selling overheads were estimated at $350,000 and $250,000 respectively. During the month, the company sold one unit of its product for $200.
Opening stock in units is:
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