A manufacturing company has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator level of activity 3,700 DLHs Overhead costs at the denominator activity level: Variable overhead cost $ 28,490 Fixed overhead cost $ 47,545 The following data pertain to operations for the most recent period: Actual hours 3,900 DLHs Standard hours allowed for the actual output 3,850 DLHs Actual total variable manufacturing overhead cost $ 29,445 Actual total fixed manufacturing overhead cost $ 47,995 The fixed manufacturing overhead budget variance for the period is closest to: $615 F $1,478 U $450 U $2,120 U
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.
A manufacturing company has a
| Denominator level of activity | 3,700 |
DLHs |
|---|---|---|
| Overhead costs at the denominator activity level: | ||
| Variable overhead cost | $ 28,490 | |
| Fixed overhead cost | $ 47,545 |
The following data pertain to operations for the most recent period:
| Actual hours | 3,900 | DLHs |
|---|---|---|
| Standard hours allowed for the actual output | 3,850 | DLHs |
| Actual total variable |
$ 29,445 | |
| Actual total fixed manufacturing overhead cost | $ 47,995 |
The fixed manufacturing overhead
|
$615 F |
||
|
$1,478 U |
||
|
$450 U |
||
|
$2,120 U |
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