Robinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs. The following data are for September Standards Direct materials Direct labor Variable overhead (per direct labor-hour) Fixed overhead (per month) Expected activity (direct laber-hours) Actual results Direct material (purchased and used) Direct labor Variable overhead Fixed overhead Units produced (actual) Direct materiais Direct labor Variatie overhead Fised overtwad Price Variance КА K4 0.75 pounds at $7.00 per pound 1.25 hours at $25.00 per hour Efficiency Variance $ 20.20 $ 415,200 17,300 9,800 pounds at $6.40 per pound 14,750 hours at $25.30 per hour $ 311,000 $ 381,740 12,100 units Required: a. Prepare a variance analysis for each variable cost for each product. b. Prepare a fixed overhead variance analysis for each product. Note: For all requirements, Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Production Volume Variance 1 pound at $7.60 per pound 1.50 hours at $30 per hour. $22.00 $492,450 23,450 Price Variance 14,158 pounds at $7.90 per pound 22,250 hours at $31.60 per hour $ 459,212 $ 490,040 14,450 units Production Volume 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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