Superior Company, which started business on April 1, uses a standard cost system in accounting for manufacturing costs. The standard costs for a unit of its product are: Materials: 2 units at P3 per kilo P6.00 Labor: 1 hour at P4 per hour 4.00 Factory overhead: 75% of direct labor cost 3.00 = P13.00 Following data were gathered from Superior's records for April: Units produced 5,000 Units sold 4,000 Sales P100,000 Purchases (11,000 kilos) P 38,500 Materials price variance (applicable to April purchases) P550 unfavorable Actual quantity of materials used 10,500 kilos Actual labor hours worked 4,800 hours Direct labor rate variance P800 favorable Factory overhead total variance P500 unfavorable a. The material quantity variance for April was ____________. b. The direct labor efficiency variance for April was ____________. c. The actual factory overhead for April was _______________.
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.
Superior Company, which started business on April 1, uses a
Materials: 2 units at P3 per kilo
P6.00
Labor: 1 hour at P4 per hour
4.00
Factory
3.00
= P13.00
Following data were gathered from Superior's records for April:
Units produced
5,000
Units sold
4,000
Sales
P100,000
Purchases (11,000 kilos)
P 38,500
Materials price variance (applicable to April purchases)
P550 unfavorable
Actual quantity of materials used
10,500 kilos
Actual labor hours worked
4,800 hours
Direct labor rate variance
P800 favorable
Factory overhead total variance
P500 unfavorable
a. The material quantity variance for April was ____________.
b. The direct labor efficiency variance for April was ____________.
c. The actual factory overhead for April was _______________.
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