Dacosta Corporation had only one jol^g process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overheadcost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May. the following activity was recorded: Raw materials (all direct materials): Beginning balance $ 8,590 Purchased during the month $38,090 Used in production $39,300 Labor: Direct labor-hours worked during the month 1,900 Direct labor cost incurred $24,510 Actual manufacturing overhead costs incurred $33,300 Inventories: Raw materials. May 30 ? Work in process. May 30 $16,937 Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May 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.
Dacosta Corporation had only one jol^g process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overheadcost. The company assigns
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The balance in the raw materials inventory account on may 30 was
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