Hardin Company has the following information available for the current year: Standard: Material 4.25 feet per unit @ P2.75 per foot Labor 7 direct labor hours @ P9.25 per unit Actual: Material 128,000 feet used (130,000 feet purchased @ P2.80 per foot) Labor 212,000 direct labor hours incurred @ P9.30 per hour 30,000 units were produced Required: 1. Compute the material purchase price and quantity variances. 2. Compute the labor rate and efficiency variances
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.
Hardin Company has the following information available for the current year:
|
Standard: |
|
|
Material |
4.25 feet per unit @ P2.75 per foot |
|
Labor |
7 direct labor hours @ P9.25 per unit |
|
Actual: |
|
|
Material |
128,000 feet used (130,000 feet purchased @ P2.80 per foot) |
|
Labor |
212,000 direct labor hours incurred @ P9.30 per hour |
|
|
30,000 units were produced |
Required:
1. Compute the material purchase price and quantity variances.
2. Compute the labor rate and efficiency variances.
Step by step
Solved in 3 steps
