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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Unit cost analysis
Using the data from P10-3, analyze and interpret the differences between the estimated and actual costs.

To determine

Concept introduction:

Actual Cost:

The cost which is incurred in actual for the procurement or production of any product and other costs for the same is referred as actual cost.

Estimated Cost:

The cost which is estimated by making a budget taking into other consideration and past experiences for the production and other costs to the product is referred as estimated cost.

The difference between the actual cost and the estimated cost by analyzing the data from P103

Explanation

After analyzing the data from P103, it can be said that there are many differences in actual and estimated cost which are as follows:

  • Like the estimates for the direct material was less and the actual cost incurred more by an amount of $36 due to some abnormal loss of material at the time of production

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