Question Wilson's Winter Woolens manufactures jackets and other wool clothing. A certain designed ski parka requires the following: Direct materials standard 2 sq yds at $13.50 per yard Direct labor standard 1.5 hours at $20.00 per hour During April, the company made 1,500 parkas and used 3,150 square yards of fabric. They purchased 3,500 sq. yards of fabric for $46,550 in April. Direct labor totaled 2,100 hours for $45,150. Calculate the direct material price and efficiency variances. 1) What is the Direct material price variance is (fill in the amount and Unfavorable or Favorable)? 2) What is the Direct material efficiency variance is (fill in the amount and Unfavorable or Favorable)?
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.
Question
Wilson's Winter Woolens manufactures jackets and other wool clothing. A certain designed ski parka requires the following:
| Direct materials standard | 2 sq yds at $13.50 per yard | |
| Direct labor standard | 1.5 hours at $20.00 per hour |
During April, the company made 1,500 parkas and used 3,150 square yards of fabric. They purchased 3,500 sq. yards of fabric for $46,550 in April. Direct labor totaled 2,100 hours for $45,150.
Calculate the direct material price and efficiency variances.
1) What is the Direct material price variance is (fill in the amount and Unfavorable or Favorable)?
2) What is the Direct material efficiency variance is (fill in the amount and Unfavorable or Favorable)?
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