FOOD Industries employs a standard cost system. FOOD has established the following PER UNIT standards for the prime costs of its product XYZ frozen desserts line: Standard Quantity Standard Price/ Rate Standard Cost of DM/ DL per unit per KG/ DLH Direct Materials 8kg %241.80 per KG $414.40 Direct Labour 0.25 DLH (15 minutes) $8.00 per DLH $2.00 Total Cost 16.40 During November, the company purchased 142,500 KG of direct materials at a total cost of $285,000. The total factory wages for November were $37,800. The company manufactured 19,000 units of XYZ during November using 142,500 kg of direct materials and 5,000 direct labour hours. Required: SHOW ALL CALCULATIONS 1. Compute the direct materials a) flexible budget, b) price and c) quantity variance for November. 2. Compute the direct labour a) flexible budget, b) rate and c) efficiency variance for November. 15 3cer
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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