he Standard manufacturing corporation uses a standard cost system in accounting for the cost of its only product. The standard cost per unit (based on 10,000 units production) was set up as follows: Direct materials, 10 kgs @ P11/kg.; Direct labor, 8 hours @ P50 per hour; Factory overhead, 8 hours @ P15 per hour. The following data on the operations appear in the company's record for the month of July: Units completed during the month, 8,000 units; units in process at the end of the month, with 100% materials but half completed, 1,000 units; Direct materials used, 95,000 kgs @ P10 per kg; Direct labor,;P3,510,000 at a rate of P54; Actual overhead for the month P985,000. Compute for the Variable efficiency variance. Indicate whether favorable or unfavorable.
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.
The Standard manufacturing corporation uses a
Compute for the Variable efficiency variance. Indicate whether favorable or unfavorable.
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