BFAR Company used a normal costing system and reported a cost of goods manufactured of P260,000, with the firm's year-end Statement of Financial Position revealing work in process and finished goods of P35,000 and P67,000, respectively. Additional information disclosed raw materials used in the production of P40,000 and direct labor of P70,000. Actual manufacturing overhead incurred was P120,000 while applied overhead to production was P140,000. Compute BFAR's beginning work in process.
BFAR Company used a normal costing system and reported a cost of goods manufactured of P260,000, with the firm's year-end Statement of Financial Position revealing work in process and finished goods of P35,000 and P67,000, respectively. Additional information disclosed raw materials used in the production of P40,000 and direct labor of P70,000. Actual manufacturing overhead incurred was P120,000 while applied overhead to production was P140,000. Compute BFAR's beginning work in process.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter5: Process Cost Accounting—general Procedures
Section: Chapter Questions
Problem 3E: Comacho Chemical Co. recorded costs for the month of 18,900 for materials, 44,100 for labor, and...
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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.
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