Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 14,000 hours for production: Variable overhead cost: Indirect factory labor $44,800 Power and light 10,360 Indirect materials 21,000 Total variable overhead cost $ 76,160 Fixed overhead cost: Supervisory salaries $54,380 Depreciation of plant and equipment 14,310 Insurance and property taxes 26,710 Total fixed overhead cost 95,400 Total factory overhead cost $171,560 Tannin has available 18,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 13,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $40,560 Power and light 9,450 Indirect materials 20,500 Total variable cost $70,510
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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Tannin Products Inc. prepared the following
factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 14,000 hours for production:Variable overhead cost: Indirect factory labor $44,800 Power and light 10,360 Indirect materials 21,000 Total variable overhead cost $ 76,160 Fixed overhead cost: Supervisory salaries $54,380 Depreciation of plant and equipment 14,310 Insurance and property taxes 26,710 Total fixed overhead cost 95,400 Total factory overhead cost $171,560 Tannin has available 18,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 13,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows:
Actual variable factory overhead cost: Indirect factory labor $40,560 Power and light 9,450 Indirect materials 20,500 Total variable cost $70,510 Tannin Products Inc.Factory Overhead Cost Variance Report-Trim DepartmentFor the Month Ended July 31Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry, leave it blank. Round your interim computations to the nearest cent, if required.
Productive capacity for the month 18,000 hrs. Actual productive capacity used for the month 13,000 hrs. Actual Budget (at actual production) Unfavorable Variances Favorable Variances Variable factory overhead costs: Indirect factory labor $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 Power and light fill in the blank 5 fill in the blank 6 fill in the blank 7 fill in the blank 8 Indirect materials fill in the blank 9 fill in the blank 10 fill in the blank 11 fill in the blank 12 Total variable factory overhead cost $fill in the blank 13 $fill in the blank 14 Fixed factory overhead costs: Supervisory salaries $fill in the blank 15 $fill in the blank 16 Depreciation of plant and equipment fill in the blank 17 fill in the blank 18 Insurance and property taxes fill in the blank 19 fill in the blank 20 Total fixed factory overhead cost $fill in the blank 21 $fill in the blank 22 Total factory overhead cost $fill in the blank 23 $fill in the blank 24 Total controllable variances $fill in the blank 25 $fill in the blank 26 $- Select - Idle hours at the standard rate for fixed factory overhead: fill in the blank 30 $- Select -
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