Question 11Sugar Plums Sweet Shop uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $1,100,000 for the year, and the fixed manufacturing overhead rate was $2.00 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below.Actual Production204, 750unitsActual Direct Labor Hours 440, 000Actual VariableManufacturing Overhead $352.000Actual Fixed $575,000Manufacturing OverheadSugar Plum Sweet Shop's Production Volume Variance for the year is:329,000 tvoraoreO $55,000 unfavorableO $19.000 favorable 56.000 unfavorable
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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