Shoemaker Perkins Company uses a standard cost system and had 500 pounds of raw material X15 on hand on September 1. The standard cost of X15 is $10 per pound. The production standard calls for 2 pounds of material X15 for each unit of product manufactured. The company manufactured 700 units of the product in September, and had 700 pounds of material X15 in stock on September 30. The actual price for material X15 purchased during the month was $1 per pound below the standard cost. The material usage variance in September was $4,000 unfavorable. What is the purchase-price variance for material X15 in September? Multiple Choice $2,000 favorable. $1,800 favorable. $1,600 favorable. $1,300 favorable. $1,400 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.
Q32
Shoemaker Perkins Company uses a standard cost system and had 500 pounds of raw material X15 on hand on September 1. The standard cost of X15 is $10 per pound. The production standard calls for 2 pounds of material X15 for each unit of product manufactured. The company manufactured 700 units of the product in September, and had 700 pounds of material X15 in stock on September 30. The actual price for material X15 purchased during the month was $1 per pound below the standard cost. The material usage variance in September was $4,000 unfavorable. What is the purchase-price variance for material X15 in September?
Multiple Choice
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$2,000 favorable.
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$1,800 favorable.
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$1,600 favorable.
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$1,300 favorable.
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$1,400 favorable.
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