Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $151 per unit. Its standard cost per unit produced $121 and its selling and administrative expenses totaled $243,000. Forsyth does not have any varlable manufacturing overhead costs and It recorded the following variances during the year: Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Fixed overhead budget variance Fixed overhead volume variance 58,100 F $11,800 U $ 5,100 U $6,000 F $44.100 F $13,600 F Required: 1. When Forsyth closes its standard cost varlances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? The cost of goods sold wa
Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $151 per unit. Its standard cost per unit produced $121 and its selling and administrative expenses totaled $243,000. Forsyth does not have any varlable manufacturing overhead costs and It recorded the following variances during the year: Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Fixed overhead budget variance Fixed overhead volume variance 58,100 F $11,800 U $ 5,100 U $6,000 F $44.100 F $13,600 F Required: 1. When Forsyth closes its standard cost varlances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? The cost of goods sold wa
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 14P: Fargo Co. manufactures products in batches of 100 units per batch. The company uses a standard cost...
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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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