Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows: Materials: (7 kilograms × $10 per kilogram) $ 70 Labor: (3 hours × $22 per hour) $ 66 All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July: In-process beginning inventory none In-process ending inventory—90% complete as to labor 900 units Units completed during the month 7,100 units Budgeted output 8,600 units Purchases of materials, in kilograms (AQ) 33,000 Total actual labor costs incurred $ 526,000 Direct labor hours worked (AQ) 22,000 hours Materials purchase-price variance $ 2,900 unfavorable Increase in materials inventory in July 1,300 kilograms Beginning inventory of materials 0 kg. The direct labor rate variance for July (to nearest dollar) is: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $42,020 unfavorable. $78,620 unfavorable. $27,620 favorable. $79,220 unfavorable. $37,620 favorabl
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.
Machine Builders Inc. adopted a
| Materials: | (7 kilograms × $10 per kilogram) | $ | 70 | |
| Labor: | (3 hours × $22 per hour) | $ | 66 | |
All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:
| In-process beginning inventory | none | ||
| In-process ending inventory—90% complete as to labor | 900 | units | |
| Units completed during the month | 7,100 | units | |
| Budgeted output | 8,600 | units | |
| Purchases of materials, in kilograms (AQ) | 33,000 | ||
| Total actual labor costs incurred | $ | 526,000 | |
| Direct labor hours worked (AQ) | 22,000 | hours | |
| Materials purchase-price variance | $ | 2,900 | unfavorable |
| Increase in materials inventory in July | 1,300 | kilograms | |
| Beginning inventory of materials | 0 | kg. | |
The direct labor rate variance for July (to nearest dollar) is: (Round your intermediate calculations to 2 decimal places.)
-
$42,020 unfavorable.
-
$78,620 unfavorable.
-
$27,620 favorable.
-
$79,220 unfavorable.
-
$37,620 favorable.
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