6 P11-4A Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,000 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 117,000 pounds of raw materials were purchased at $0.92 per pound. All materials purchased were used during the year. Instructions (a) If the materials price variance was $3,510 favorable, what was the standard materials price per pound? (b) If the materials quantity variance was $4,750 unfavorable, what was the standard materials quantity per unit? 11 Standard Costs and Balanced Scorecard 57.20 per DLH Answer questions about variances. (LO 4, 5), AN (b) 4.0 pounds (c) What were the standard hours allowed for the units produced? (d) If the labor quantity variance was $7,200 unfavorable, what were the actual direct labor hours worked? (e) If the labor price variance was $9,080 favorable, what was the actual rate per hour? (f) If total budgeted manufacturing overhead was $360,000 at normal capacity, what was the predetermined overhead rate? (g) What was the standard cost per unit of product? (h) How much overhead was applied to production during the year? (i) Using one or more answers above, what were the total costs assigned to work in process?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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