Required information EX 10-26, 27 (Algo) Use the following information for the Exercises below. During June, Danby Company's material purchases amounted to 7,800 pounds at a price of $8.50 per pound. Actual costs incurred in the production of 1,600 units were as follows: Direct labor: Direct material: $ 137,280 ($19.20 per hour) $ 43,350 ($8.50 per pound) The standards for one unit of Danby Company's product are as follows: Direct Labor: Quantity, 4 hours per unit Rate, $19.10 per hour Direct Material: Quantity, 3 pounds per unit Price, $8.20 per pound EX 10-26 (Algo) Straightforward Calculation of Variances (LO 10-1, 10-3) Required: Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Note: Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Direct-material price variance Direct-material quantity variance Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance
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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