A company operates a job costing system. The estimated costs for job 173 are as follows. Direct materials 5 metres @ $20 per metre Direct labour 14 hours @ $8 per hour Variable production overheads are recovered at the rate of $3 per direct labour hour. Fixed production overheads for the year are budgeted to be $200,000 and are to be recovered on the basis of the total of 40,000 direct labour hours for the year. Other overheads, in relation to selling, distribution and administration, are recovered at the rate of $80 per job. What is the total cost of job 173? A $404 B $300 C $254 D $324
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.
A company operates a
The estimated costs for job 173 are as follows.
Direct materials 5 metres @ $20 per metre
Direct labour 14 hours @ $8 per hour
Variable production overheads are recovered at the rate of $3 per direct labour hour.
Fixed production overheads for the year are budgeted to be $200,000 and are to be recovered on the
basis of the total of 40,000 direct labour hours for the year.
Other overheads, in relation to selling, distribution and administration, are recovered at the rate of $80 per job.
What is the total cost of job 173?
A $404
B $300
C $254
D $324
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