An apparel manufacturing unit has set a standard cost of 150 per shirt. In a month, it actually produced 800 shirts at a total cost of124,000. Calculate the cost variance and state whether it is favourable or unfavourable.

Question

Accepted Answer

Unfavourable variance of $4,000

An apparel manufacturing unit has set a standard cost of $150 p er s hi r t . I nam o n t h, i t a c t u a l l y p r o d u ce d 800 s hi r t s a t a t o t a l cos t o f$ 124,000. Calculate the cost variance and state whether it is favourable or unfavourable.

Step-by-step solution

An apparel manufacturing unit has set a standard cost of 150pershirt.Inamonth,itactuallyproduced800shirtsatatotalcostof124,000. Calculate the cost variance and state whether it is favourable or unfavourable.

Step-by-step solution

An apparel manufacturing unit has set a standard cost of $150 p er s hi r t . I nam o n t h, i t a c t u a l l y p r o d u ce d 800 s hi r t s a t a t o t a l cos t o f$ 124,000. Calculate the cost variance and state whether it is favourable or unfavourable.