Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. Production volume 10,000 units 12,000 units Direct materials $ 614,000 $ 736,800 Direct labor $ 185,000 $ 222,000 Manufacturing overhead $ 1,008,300 $ 1,042,500 The best estimate of the total cost to manufacture 10,800 units is closest to: (Round your intermediate calculations to 2 decimal places.)
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.
Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.
| Production volume | 10,000 | units | 12,000 | units |
|---|---|---|---|---|
| Direct materials | $ 614,000 | $ 736,800 | ||
| Direct labor | $ 185,000 | $ 222,000 | ||
| Manufacturing overhead | $ 1,008,300 | $ 1,042,500 |
The best estimate of the total cost to manufacture 10,800 units is closest to: (Round your intermediate calculations to 2 decimal places.)
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