Myers Corporation has the following data related to direct materials costs for November: actual cost for 4,680 pounds of material at $5.20 and standard cost for 4,470 pounds of material at $6.20 per pound. The direct materials price variance is
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.
Myers Corporation has the following data related to direct materials costs for November: actual cost for 4,680 pounds of material at $5.20 and
The direct materials price variance is
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