Sunland Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Sunland's controller. The company applies overhead on the basis of machine hours. Variable manufacturing overhead Fixed manufacturing overhead Direct labor hours Machine hours Variable overhead spending variance Annual Budget $1,722,000 $1,205,160 Variable overhead efficiency variance Fixed overhead spending variance During the month of May, Sunland used 4,380 direct labor hours and 21,860 machine hours. The flexible budget for the month allowed 4,240 direct labor hours and 21,080 machine hours. Actual fixed manufacturing overhead incurred was $107,000; variable manufacturing overhead incurred was $150,420. (a) Calculate the variable overhead spending and efficiency variances for May. (Round per unit value to 2 decimal places, e.g. 52.75 and final answers to O decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter O for the amounts.) $ +A $ 50,760 246,000 +A May Budget $149,800 $100,430 4,230 21,400 (b) Calculate the fixed overhead spending variance for May. (If variance is zero, select "Not Applicable" and enter O for the amounts.)
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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