SOUND CORE WIRELESS sells a variety of mobile telephone accessories including several brands of Wireless Earbuds Bluetooth Headphones. The earbuds are sold in cases, with each case containing a pair of earbuds. SOUND CORE began the last quarter (October to December) of 2021 with 30 cases of the (TOZO T6) earbuds at a total cost of $187,800. During the quarter the business completed the following transactions relating to the “TOZO T6” earbuds: October 8 8 cases were purchased at a cost of $6,202 each. In addition, the business paid a freight charge of $248 cash on each case to have the inventory shipped from the point of purchase to their place of business. October 31 The sales for October were 85 cases which yielded total sales revenue of $809,030. (25 of these cases were sold on account to three longstanding customers) November 4 A new batch of 67 cases was purchased at a total cost of $465,650 November 10 5 of the cases purchased on November 4 were returned to the supplier, as they were not of the type nor model ordered. November 30 During the month 60 cases were sold at a price of $10,350 each. December 4 A customer, to whom 9 cases were sold during the first business day of November, returned 3 of the cases, as they were of another make and model. December 10 Owing to an increased demand, a further 115 cases were purchased at a cost of $7,900 each; these were subject to a trade discount of 2% each. December 30 121 cases were sold during December at a unit selling price of $11,085. December 31 An actual count of inventory was carried out which revealed that there were 34 cases of the “TOZO T6” brand of merchandise in the store room Unless otherwise stated, assume that all purchases were on account and received on the dates stated. Required: (c)
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.
SOUND CORE WIRELESS sells a variety of mobile telephone accessories including several brands of
Wireless Earbuds Bluetooth Headphones. The earbuds are sold in cases, with each case containing a pair of
earbuds. SOUND CORE began the last quarter (October to December) of 2021 with 30 cases of the (TOZO
T6) earbuds at a total cost of $187,800. During the quarter the business completed the following transactions
relating to the “TOZO T6” earbuds:
October 8 | 8 cases were purchased at a cost of $6,202 each. In addition, the business paid a freight charge of $248 cash on each case to have the inventory shipped from the point of purchase to their place of business. |
October 31 | The sales for October were 85 cases which yielded total sales revenue of $809,030. (25 of these cases were sold on account to three longstanding customers) |
November 4 | A new batch of 67 cases was purchased at a total cost of $465,650 |
November 10 | 5 of the cases purchased on November 4 were returned to the supplier, as they were not of the type nor model ordered. |
November 30 | During the month 60 cases were sold at a price of $10,350 each. |
December 4 | A customer, to whom 9 cases were sold during the first business day of November, returned 3 of the cases, as they were of another make and model. |
December 10 | Owing to an increased demand, a further 115 cases were purchased at a cost of $7,900 each; these were subject to a trade discount of 2% each. |
December 30 | 121 cases were sold during December at a unit selling price of $11,085. |
December 31 | An actual count of inventory was carried out which revealed that there were 34 cases of the “TOZO T6” brand of merchandise in the store room |
Unless otherwise stated, assume that all purchases were on account and received on the dates stated.
Required:
(c)
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