Nancy Inc manufactures mobile phones that come with Bluetooth headphone. Each Bluetooth headphone requires the following inputs and costs: Inputs Direct materials Direct labor Variable manufacturing overhead Standard Quantity pounds $5.00 hours $23.00 hours $5.50 Actual direct materials cost (purchased and used) Actual direct labor cost 3.5 0.60 0.60 Actual results for the year 2022 were as follows: Actual output 21,000 units Actual Quantity 74,000 12,000 Total actual variable manufacturing overhead $71,400 cost Standard Price i. Direct materials price variance ii. Direct materials quantity variance iii. Direct labor rate variance iv. Direct labor efficiency variance V. Variable manufacturing overhead rate variance vi. per pound per hour per hour Variable manufacturing overhead efficiency variance Actual price pounds $4.00 hours $22.00 per hour a) Compute the standard variable product cost and actual variable cost per unit. b) For the year 2022, compute the following variances, indicating whether each is favorable or unfavorable: per pound c) Will any of your answer in (b) be different if the company actually used 73,000 pounds of material only.
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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