Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $460,000. Selling and administrative expenses were $42,100. Assume that the amount of raw materials purchased equaled the amount used.
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.
![Waterway Corporation accumulates the following data relative to jobs started and finished during the month of June 2025.
Costs and Production Data
Raw materials unit cost
Raw materials units
Direct labor payroll
Direct labor hours
Manufacturing overhead incurred
Manufacturing overhead applied
Machine hours expected to be used at normal capacity
Budgeted fixed overhead for June
Variable overhead rate per machine hour
Fixed overhead rate per machine hour
Actual
Standard
$2.30
$2.20
11,100
10,300
$170,200
$164,160
14,800
15,200
$201,200
$205,200
43,500
$65,250
$3
$1.50
Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The
jobs were sold for $460,000. Selling and administrative expenses were $42,100. Assume that the amount of raw materials purchased
equaled the amount used.
(a)
Compute all of the variances for (1) direct materials and (2) direct labor. (Round per unit values to 2 decimal places, e.g. 52.75 and
final answers to O decimal places, e.g. 52.)
(1)
Total materials variance
$
Materials price variance
$
Materials quantity variance
$
(2)
Total labor variance
$
Labor price variance
$
Labor quantity variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbda050ea-9088-41bf-b474-5039750c66e1%2F7922509c-c9cf-4904-8bc3-d3bc49c2d080%2Fljac2iq_processed.png&w=3840&q=75)
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