Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cost Category Estimated Cost Actual Cost Variance Explanation Planning $70,000 $80,000 +$10,000 Additional market research Development $300,000 $320,000 +$20,000 Higher material costs Testing $100,000 $90,000
| Cost Category | Estimated Cost | Actual Cost | Variance | Explanation |
|---|---|---|---|---|
| Planning | $70,000 | $80,000 | +$10,000 | Additional market research |
| Development | $300,000 | $320,000 | +$20,000 | Higher material costs |
| Testing | $100,000 | $90,000 | -$10,000 | Efficient process optimization |
| Deployment | $50,000 | $55,000 | +$5,000 | Unexpected logistics expenses |
Based on the above table, answer the following questions:
- Calculate the total estimated cost and the total actual cost.
- Calculate the overall cost variance for the project.
- Discuss the potential reasons for the variances and suggest strategies to manage future cost overruns.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
2nd Edition
0078110823, 9780078110825
