The Apoundright Company uses standard costing and has established the following standards for its single product: Direct materials: 2 gallons at $3 per gallon Direct labor: 0.5 hours at $8 per hour Variable overhead: 0.5 hours at $2 per hour During November, the company made 4,000 units and incurred the following costs: Direct materials purchased: 8,100 gallons at $3.10 per gallon Direct materials used: 7,600 gallons Direct labor used: 2,200 hours at $8.25 per hour Actual variable overhead: $4,175 The company applies variable overhead to products on the basis of standard direct labor-hours. The materials price variance for November was: A. $2,310 U B. $2,310 F C. $810 U D. $810 F 2. The materials quantity variance for November was: A. $1,200 U B. $1,200 F C. $300 U D. $1,500 F 3. The labor rate variance for November was: A. $1,050 U B. $550 U C. $2,150 U D. $2,150 F
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.
The Apoundright Company uses
Direct materials: 2 gallons at $3 per gallon
Direct labor: 0.5 hours at $8 per hour
Variable
During November, the company made 4,000 units and incurred the following costs:
Direct materials purchased: 8,100 gallons at $3.10 per gallon
Direct materials used: 7,600 gallons
Direct labor used: 2,200 hours at $8.25 per hour
Actual variable overhead: $4,175
The company applies variable overhead to products on the basis of standard direct labor-hours.
- The materials price variance for November was:
A. $2,310 U
B. $2,310 F
C. $810 U
D. $810 F
2. The materials quantity variance for November was:
A. $1,200 U
B. $1,200 F
C. $300 U
D. $1,500 F
3. The labor rate variance for November was:
A. $1,050 U
B. $550 U
C. $2,150 U
D. $2,150 F
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