The data below relate to the standards for the sole product of Marshal Corporati August: Standard direct material price $1.40 per kg Standard quantity of direct material 20 kg per unit Standard direct labour rate $17.00 per hour Standard direct labour hour 5 hours per unit Actual results for November are as follows: Actual output 1,100 units Direct material purchased 36,000 kg @ $1.76 per kg Direct material used 19,000 kg Direct labour 5,200 hours @ $18 per hour Required: Calculate the following variances, indicating whether each variance is favourable or unfavourable: (1) Direct material price variance (ii) Direct material quantity variance (iii) Direct labour rate variance (iv) Direct labour efficiency variance
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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