The information below has been taken from the cost records of H Company for the past year: Direct materials used Rs.1,250 Total manufacturing costs 6,050 Manufacturing overhead 2,800 Selling expenses 1,000 Prime Cost 270% of Purchases Direct materials inventory, January 1 130 Direct materials inventory, December 31 80 Work in process, January 1 250 Work in process, December 31 400 Finished goods, January 1 300 Finished goods, December 31 200 Required: a. Compute the cost of Raw Material purchased. b. Compute the cost of direct labor for the year. c. Compute the Cost of Goods Manufactured for the year. d. Compute the Cost of Goods Sold for the year.
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 information below has been taken from the cost records of H Company for the past year:
|
Direct materials used |
Rs.1,250 |
|
Total |
6,050 |
|
Manufacturing overhead |
2,800 |
|
Selling expenses |
1,000 |
|
Prime Cost |
270% of Purchases |
|
Direct materials inventory, January 1 |
130 |
|
Direct materials inventory, December 31 |
80 |
|
Work in process, January 1 |
250 |
|
Work in process, December 31 |
400 |
|
Finished goods, January 1 |
300 |
|
Finished goods, December 31 |
200 |
Required:
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