For producing 200 units of product, a company uses P60,000 of direct materials, pays P70,000 of direct labor and incurs P20,000 and P60,000 variable overhead and fixed overhead, respectively. Compute
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.
For producing 200 units of product, a company uses P60,000 of direct materials, pays P70,000 of direct labor and incurs P20,000 and P60,000 variable overhead and fixed overhead, respectively. Compute the product unit cost assuming that 450 units are produced.
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