Fluegge Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 5.7 liters $ 5.40 per liter Direct labor 0.70 hours $ 20.60 per hour Variable manufacturing overhead 0.70 hours $ 5.50 per hour The company has reported the following actual results for the product for December: Actual output 4,100 units Raw materials purchased 25,100 liters Actual price of raw materials $ 4.80 per liter Actual cost of raw materials purchased $ 120,480 Raw materials used in production 23,360 liters Actual direct labor-hours 2,700 hours Actual direct labor rate $ 21.20 per hour Actual direct labor cost $ 57,240 Actual variable overhead rate $ 5.90 per hour Actual variable overhead cost $ 15,930 The raw materials price variance for the month is closest to:
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.
Fluegge Incorporated has provided the following data concerning one of the products in its
| Inputs | Standard Quantity or Hours per Unit of Output | Standard Price or Rate | ||
|---|---|---|---|---|
| Direct materials | 5.7 | liters | $ 5.40 | per liter |
| Direct labor | 0.70 | hours | $ 20.60 | per hour |
| Variable manufacturing overhead | 0.70 | hours | $ 5.50 | per hour |
The company has reported the following actual results for the product for December:
| Actual output | 4,100 | units |
|---|---|---|
| Raw materials purchased | 25,100 | liters |
| Actual price of raw materials | $ 4.80 | per liter |
| Actual cost of raw materials purchased | $ 120,480 | |
| Raw materials used in production | 23,360 | liters |
| Actual direct labor-hours | 2,700 | hours |
| Actual direct labor rate | $ 21.20 | per hour |
| Actual direct labor cost | $ 57,240 | |
| Actual variable overhead rate | $ 5.90 | per hour |
| Actual variable overhead cost | $ 15,930 |
The raw materials price variance for the month is closest to:
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