ACC 307 – HW #4 – Chapters 7 and 8 The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing laborhours (DLH). At the beginning of 2012, Beal adopted the following standards for its manufacturing costs: Direct materials Direct manufacturing labor Manufacturing overhead: Input 3 lb. at $5 per Ib. 5 hrs. at $15 per hr. Cost per Output Unit $ 15.00 75.00 $6 per DLH $8 per DLH Variable 30.00 40.00 Fixed Standard manufacturing cost per output unit $160.00 The denominator level for total manufacturing overhead per month in 2012 is 40,000 direct manufacturing labor-hours. Beal's flexible budget for January 2012 was based on this denominator level. The records for January indicated the following: Direct materials purchased Direct materials used Direct manufacturing labor Total actual manufacturing overhead (variable and fixed) Actual production 25,000 lb. at $5.20 per Ib. 23,100 lb. 40,100 hrs. at $14.60 per hr. $600,000 7,800 output units Instructions. 2. For the month of January 2012, compute the following variances, indicating whether each is favorable (F) or unfavorable (U). c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Total manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance
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.
ACC 307 – HW #4 – Chapters 7 and 8 The Beal Manufacturing Company’s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing laborhours (DLH). At the beginning of 2012, Beal adopted the following standards for its
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