EXERCISE NO. 1 The following direct materials and direct labour data are for the operations of Batista Manufacturing Company for the month of August: Costs Actual labour rate $13.00 per hour Actual materials price Standard labour rate Standard materials price $89.00 per tonne $12.00 per hour $90.00 per tonne Quantities Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used 3,200 hours 910 tonnes 3,240 tonnes 900 tonnes 1. Calculate the total, price, and quantity variances for materials and labour. 2. Provide two possible explanations for each of the unfavourable variances calculated in part (a), and suggest which department might be responsible for the unfavourable result.
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.
![EXERCISE NO. 1
The following direct materials and direct labour data are for the operations of Batista
Manufacturing Company for the month of August:
Costs
Actual labour rate $13.00 per
hour
Actual materials
price
Standard labour
rate
Standard
materials price
$89.00 per
tonne
$12.00 per
hour
$90.00 per
tonne
Quantities
Actual hours incurred and used
Actual quantity of materials
purchased and used
Standard hours used
Standard quantity of materials
used
3,200
hours
910
tonnes
3,240
tonnes
900
tonnes
1. Calculate the total, price, and quantity variances for materials and labour.
2. Provide two possible explanations for each of the unfavourable variances calculated in part
(a), and suggest which department might be responsible for the unfavourable result.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa4bb393f-8571-49ff-b9c6-dd62f7b2ad5c%2Fba888514-de64-4491-a2a8-dafc0aa8ba95%2Fsea73zr_processed.png&w=3840&q=75)
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