The following data were taken from the records of a company. Period 1 Period 2 Period 3 Production(units) 30,000 38000 27000 Sales 30,000 27000 38000 Opening stock ------ ------ 11000 Closing stock ------ 11,000 ------ Per unit cost are as follows: Direct material $ 1.5 Direct labor 1.0 Production overhead 3.0 Selling price per unit $ 9 Administrative overheads are fixed at $25000 and one third of the production overheads are fixed. Required A) Prepare separate income statements for all three year B) Prepare separate income statements on full costing and variable costing
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.
The following data were taken from the records of a company.
Period 1 Period 2 Period 3
Production(units) 30,000 38000 27000
Sales 30,000 27000 38000
Opening stock ------ ------ 11000
Closing stock ------ 11,000 ------
Per unit cost are as follows:
Direct material $ 1.5
Direct labor 1.0
Production overhead 3.0
Selling price per unit $ 9
Administrative overheads are fixed at $25000 and one third of the production overheads are fixed.
Required
A) Prepare separate income statements for all three year
B) Prepare separate income statements on full costing and variable costing
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