Company had the following information: Budgeted variable factory overhead P66,000 Budgeted fixed factory overhead P46,500 Actual variable factory overhead P70,500 Actual fixed factory overhead P55,500 Budgeted cost-driver activity levels: Direct-labor hours 32,000 Direct-labor costs P150,000 Machine hours 60,000 Production setups 15,000 Actual cost-driver activity levels: Direct-labor hours 31,500 Direct-labor costs P165,600 Machine hours 56,190 Production setups 14,280 The budgeted factory-overhead rate using direct-labor hours as the cost driver is _____.
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.
Budgeted variable factory
Budgeted fixed factory overhead P46,500
Actual variable factory overhead P70,500
Actual fixed factory overhead P55,500
Budgeted cost-driver activity levels:
Direct-labor hours 32,000
Direct-labor costs P150,000
Machine hours 60,000
Production setups 15,000
Actual cost-driver activity levels:
Direct-labor hours 31,500
Direct-labor costs P165,600
Machine hours 56,190
Production setups 14,280
The budgeted factory-overhead rate using direct-labor hours as the cost driver is _____.
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