Q1. EVERYTHING WILL BE OK! Corp uses standard costing system. The standard cost of manufacturing of product X is as follows: Materials 50 Kilos Labor 6 Hours Factory overhead 8 Hours 60 / kilo 50 per hour 30 per hour Budgeted fixed factory overhead is P 20,000 and normal capacity of the company is 400 units. The actual costs incurred during the month were: Materials used is 16,000 kilos at P 62 per kilo Labor -1,900 hours at P 44 per hour Overhead: Variable overhead is P 38,750
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.
a.Compute the material spending (price) variance.
b.Compute the material efficiency (usage) variance.
c. Compute the labor efficiency variance.
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