P Cleaning Products manufactures a product using a process that allows for substitution between two materials, X-1 and Y-7. The company has the following direct materials data for its product: Standard costs for one unit of output X-1 68 units of input at $1.00 12 units of input at $4.60 Y-7 The following results were reported for January: Units of output produced 18,200 units
P Cleaning Products manufactures a product using a process that allows for substitution between two materials, X-1 and Y-7. The company has the following direct materials data for its product: Standard costs for one unit of output X-1 68 units of input at $1.00 12 units of input at $4.60 Y-7 The following results were reported for January: Units of output produced 18,200 units
Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter15: Lean Accounting And Productivity Measurement
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Problem 2CE: During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum...
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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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Transcribed Image Text:P Cleaning Products manufactures a product using a process that allows for substitution between two materials, X-1 and
Y-7. The company has the following direct materials data for its product:
Standard costs for one unit of output
X-1
X-1
Y-7
The following results were reported for January:
Units of output produced
18,200 units
Materials purchased
68 units of input at $1.00
12 units of input at $4.60
1,204,000 units at $1.02
224,000 units at $4.55
P has a policy of holding no inventories of any kind.
Required:
a. Compute materials price and efficiency variances.
b. Compute materials mix and yield variances.
Y-7
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