The direct materials and direct labour standards for one bottle of Clean-All spray cleaner are given below: Standard Quantity or Hours 6.0 millilitres Standard Price or Rate $ 0.34 per millilitre $ 12.00 per hour Standard Cost Direct materials Direct labour $ 2.04 $ 3.60 0.3 hours During the most recent month, the following activity was recorded: a. 30,000 millilitres of material was purchased at a cost of $0.29 per millilitre. b. All of the material was used to produce 3,000 bottles of Clean-All. c. 775 hours of direct labour time was recorded at a total labour cost of $9,300. Required. 1. Compute the direct materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Materials price variance Materials quantity 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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