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Perform a variance analysis for a production process with the following data: Category Actual Costs ($) Standard Costs ($) Direct Materials 65,000 60,000 Direct Labor
Perform a variance analysis for a production process with the following data:
| Category | Actual Costs ($) | Standard Costs ($) |
|---|---|---|
| Direct Materials | 65,000 | 60,000 |
| Direct Labor | 52,000 | 50,000 |
| Variable Overhead | 38,000 | 35,000 |
| Fixed Overhead | 25,000 | 22,000 |
Requirements:
- Calculate the total variance for each category.
- Analyze the variances into price and efficiency components.
- Present the analysis in a variance report.
- Discuss potential causes of each variance.
- Provide recommendations for cost control based on the analysis.
- Summarize the impact of variances on profitability.
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Survey of Accounting
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay
5th edition
1259631125, 978-1259631122
