Sharp Company manufactures a product for which the following standards have been set: Standard Quantity Standard Price Standard or Rate $5 per foot ? per hour or Hours Cost $ 15 3 feet ? hours Direct materials Direct labor ? During March, the company purchased direct materials at a cost of $45,375, all of which were used in the production of 2,350 unit product. In addition, 4,800 direct labor-hours were worked on the product during the month. The cost of this labor time was $50,4 The following variances have been computed for the month: Materials quantity variance Labor spending variance Labor efficiency variance $ 2,250 U $ 3,400 U $ 1,000 U
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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