ENCHANTRESS CORP. is applying overhead with direct labor hours as its basis. Four direct labor hours are needed to produce one unit of finished goods. Planned production for the period was set at 15,000 units. Budgeted manufacturing overhead amounted to P150,000 for the period, of which 40% of this cost is fixed. The 18,000 direct labor hours during the period resulted in producing 10,000 units. For the current month, the company incurred variable manufacturing overhead amounting to P65,000 and fixed manufacturing overhead cost was P50,000. How much is the total budget variance? a. P165,000 F b. P165,000 UF C. P5,000 UF d. P5,000 F 2. How much is the total spending variance? a. P38,000 F b. P38,000 UF C. P28,000 UF d. P5,000 F
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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