2. Big Woof Co manufactures a single product, the Bark, details of which are as follows. Per unit Selling price Direct materials Direct labour Variable overheads Annual fixed production overheads are budgeted to be $1.6 million and Big Woofexpects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads are $1.6 million for the year. Budgeted fixed selling costs are $320,000 per quarter. Actual sales and production units for the first quarter of 2020 are given below. Sales Production 180.00 40.00 16.00 10.00 (a) Marginal costing (b) Absorption costing January-March 240,000 280,000 There is no opening inventory at the beginning of January. Prepare income statements for the half year, using
2. Big Woof Co manufactures a single product, the Bark, details of which are as follows. Per unit Selling price Direct materials Direct labour Variable overheads Annual fixed production overheads are budgeted to be $1.6 million and Big Woofexpects to produce 1,280,000 units of the Bark each year. Overheads are absorbed on a per unit basis. Actual overheads are $1.6 million for the year. Budgeted fixed selling costs are $320,000 per quarter. Actual sales and production units for the first quarter of 2020 are given below. Sales Production 180.00 40.00 16.00 10.00 (a) Marginal costing (b) Absorption costing January-March 240,000 280,000 There is no opening inventory at the beginning of January. Prepare income statements for the half year, using
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
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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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