Ford Motor Company manufactures automobiles and uses standard costing to evaluate performance. The cost accountant...
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Accounting
Ford Motor Company manufactures automobiles and uses standard costing to evaluate performance. The cost accountant compared actual costs to standard costs and identified variances in direct materials, direct labor, and overhead. Actual direct materials cost amounted to $2,000,000, whereas standard direct materials cost was $1,800,000. Actual direct labor cost was $1,500,000, compared to standard direct labor cost of $1,400,000. Actual overhead cost totaled $1,200,000, while standard overhead cost was $1,100,000. Analyze the variances and provide possible explanations for the differences between actual and standard costs.
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