Standard Gears produces lawn mower gears. It uses units as the cost driver for overhead. The following information was provided concerning its standard cost system: Actual Data Budgeted and Standard Data Produced 12,400 units Budgeted units 12,500 units Materials purchased 4,650 lbs. for a total cost of $32,550 Budgeted
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.
Standard Gears produces lawn mower gears. It uses units as the cost driver for
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Actual Data |
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Budgeted and Standard Data |
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Produced |
12,400 units |
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Budgeted units |
12,500 units |
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Materials purchased |
4,650 lbs. for a total cost of $32,550 |
Budgeted materials |
0.40 lb. @ $7.10 per lb. |
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Materials used |
4,700 lbs. |
Budgeted labor |
72 minutes @ $12.00 per hour |
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Labor worked |
7,460 hrs. costing $79,822 |
Budgeted variable overhead |
$35,625 |
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Actual overhead |
Fixed: $84,800 Variable $36,100 |
Budgeted fixed overhead |
$85,500 |
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How much is the standard cost of each lawn mower gear?
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$25.73 |
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$25.95 |
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$25.59 |
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$28.59 |
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$26.93 |
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