The standard and actual cost data of M/s. ABC Company are as follows: Standard Raw Material (DM)
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 standard and actual cost data of M/s. ABC Company are as follows:
Standard Raw Material (DM) is 5000 units @ Rs. 10 while Actual 4900 units @ Rs. 8
Standard Direct Labor (DL) is 10000 hours @ Rs. 4 while Actual 12000 Hours @ Rs. 5
Standard Factory Overhead (FOH) is 50% of Direct Labor while Actual FOH Rs. 15000
Required:
- A) Calculate;
- Material Price Variance and Material Quantity Variance
- Labor rate variance and Labor time variance
- Overhead Variance
- B) Give
journal entries to record the above information and close the variance accounts.
hello sir maam pls give me Ans B
- B) Give journal entries to record the above information and close the variance accounts.
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