Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7.900 units, but its actual level of activity was 7,860 units. The company has provided the following dats concerning the formulas used in its budgeting and is actual results for March Data used in budgeting Revenue Direct labor Direct materials Manufacturing overhead Selling and administrative expenses Total expenses Actual results for March Revenue Direct labor Direct materials Fixed element per month Manufacturing overhead Selling and administrative expenses $ 297,318 $ 59,962 $ 135,850 $ 51,370 $ 31,950 The spending variance for direct materials in March would be closest to 50 50 0 38,200 27,400 $ 65,600 Variable element per unit $ 39.80 $ 7.70 18.00 1.50 0.50 $ 27.70
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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