Cutie Pie Company produces a single product. The standard cost for the product follows: Direct materials used in production 5,000 yards Direct materials purchased (6,000 yards) P 28,500 Direct labor costs incurred (2,100 hours) P 17,850 Variable manufacturing overhead incurred P 10,080 During the recent period, the company produced 1,200 units of product. Various costs associated with the production of these units are applied to products on the basis of direct labor hours. Other information are as follows: Direct materials (4 yards @ P5) P 20 Direct labor (1.5 hours @ P10) P 15 Variable manufacturing overhead (1.5 hours @ P4) P 6 The company record all variances at the earliest time possible. The labor efficiency variance for the period 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.
Cutie Pie Company produces a single product. The
Direct materials used in production 5,000 yards
Direct materials purchased (6,000 yards) P 28,500
Direct labor costs incurred (2,100 hours) P 17,850
Variable manufacturing
During the recent period, the company produced 1,200 units of product. Various costs associated with the production of these units are applied to products on the basis of direct labor hours. Other information are as follows:
Direct materials (4 yards @ P5) P 20
Direct labor (1.5 hours @ P10) P 15
Variable manufacturing overhead (1.5 hours @ P4) P 6
The company record all variances at the earliest time possible.
The labor efficiency variance for the period is
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