Matthews Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 143,000 square feet of extruded vinyl purchased at $1.30 per square foot. Production required 400 direct labor hours that cost $16.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.35 per square foot. The labor standard was .028 direct labor hour per fender, at a standard cost of $15.00 per hour. Compute the cost and effeciency variances for direct materials and direct labor. Does tha pattern of variences suggest Matthews Fender's managers have been making tradeoffs? Explain.
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.
Matthews Fender, which uses a
Compute the cost and effeciency variances for direct materials and direct labor. Does tha pattern of variences suggest Matthews Fender's managers have been making tradeoffs? Explain.
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