The following standard costs were developed for one of the products of Razzmatazz Corporation: STANDARD COST CARD PER UNIT Materials: 4 feet × $14.25 per foot $ 57.00 Direct labor: 8 hours × $10 per hour 80.00 Variable overhead: 8 direct labor hours × $8 per hour 64.00 Fixed overhead: 8 direct labor hours × $12 per hour 96.00 Total standard cost per unit $297.00 The following information is available regarding the company's operations for the period: Units produced: 11,000 Materials purchased: 52,000 feet at $13.95 per foot Materials used: 40,000 feet Direct labor: 84,000
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.
The following
STANDARD COST CARD PER UNIT
Materials: 4 feet × $14.25 per foot $ 57.00
Direct labor: 8 hours × $10 per hour 80.00
Variable
Fixed overhead: 8 direct labor hours × $12 per hour 96.00
Total standard cost per unit $297.00
The following information is available regarding the company's operations for the period:
|
Units produced: |
11,000 |
|
Materials purchased: |
52,000 feet at $13.95 per foot |
|
Materials used: |
40,000 feet |
|
Direct labor: |
84,000 hours costing $840,000 |
|
|
|
|
Manufacturing overhead incurred: |
|
|
Variable |
$756,000 |
|
Fixed |
$1,000,000 |
Budgeted fixed manufacturing overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.
Required:
- Calculate the materials price variance.
- Calculate the materials usage variance.
- Calculate the direct labor rate variance.
- Calculate the direct labor efficiency variance.
- Calculate the variable manufacturing overhead spending variance.
- Calculate the variable manufacturing overhead efficiency variance.
- Calculate the fixed manufacturing overhead spending variance.
- Calculate the fixed manufacturing overhead volume variance.
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