Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): Direct materials (3 lbs. © 1.45) $4.35 Direct labor (0.4 hr. © 17.00) 6.80 Variable overhead (0.4 hr. © 4.00) 1.60 Fixed overhead (0.4 hr. © 8.00) 3.20 Total $15.95 Selling and administrative costs: Variable $1.60 per unit Fixed $221,000 During the year, the company had the following activity: Units produced Units sold 26,500 23,850 Unit selling price $35 Direct labor hours worked 10,600 Actual fixed overhead was $12,000 less than budgeted fixed overhead. Budgeted variable overhead was $4,600 less than the actual variable overhead. The company used an expected actual activity level of 10,600 direc the predetermined overhead rates. Any overhead variances are closed to Cost of Goods Sold. Required:

Q: The advantages of standard costing exceeds its disadvantages. True or false? Explain further

A: Standard Costing The primary purpose of implementing the cost accounting system to any organisation…

Q: a. what are the primary differences between traditional and activity-based costing?

A: Traditional costing and Activity based costing are two types of costing methods that are being used…

Q: Why is absorption costing the method allowable for GAAP yet managers prefer variable costing

A: In variable costing only variable costs are included in the product cost. Fixed costs re considered…

Q: activity-based costing systems have a tendency to distort product costs. True or False?

A: The overhead is applied to the production on the basis of predetermined overhead rate. The…

Q: how traditional costing switch over activity based costing

A: Activity-based costing (ABC) is a modern costing method that improves the accuracy of product…

Q: Which costing system would be more efficient when direct materials and direct labor costs are high,…

A: There are mainly two types costing method Traditional costing Activity based costing

Q: iable costs change in direct proportion to a change in the activity level. True or False?

A: There are two types of one is fixed cost and other is variable cost and both are part of the total…

Q: ariable costing is sometimes called a. differential b. direct

A: Variable costing is a costing system under which those costs of production that vary with output are…

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.