The following data are given for Zoyza Company: Line Item Description Value Budgeted production (at 100% of normal capacity) 26,000 units Actual production 27,500 units Materials: Standard price per ounce $6.50 Standard ounces per completed unit 8 Actual ounces purchased and used in production 228,000 Actual price paid for materials $1,504,800 Labor: Standard hourly labor rate $22.00 per hour Standard hours allowed per completed unit 6.6 Actual labor hours worked 183,000 Actual total labor costs $4,020,000 Overhead: Actual and budgeted fixed overhead $1,029,600 Standard variable overhead rate $24.50 per standard labor hour Actual variable overhead costs $4,520,000 Overhead is applied on standard labor hours. The fixed factory overhead volume variance is a. $73,250 favorable b. $59,400 favorable c. $59,400 unfavorable
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 following data are given for Zoyza Company:
| Line Item Description | Value |
|---|---|
| Budgeted production (at 100% of normal capacity) | 26,000 units |
| Actual production | 27,500 units |
| Materials: | |
| Standard price per ounce | $6.50 |
| Standard ounces per completed unit | 8 |
| Actual ounces purchased and used in production | 228,000 |
| Actual price paid for materials | $1,504,800 |
| Labor: | |
| Standard hourly labor rate | $22.00 per hour |
| Standard hours allowed per completed unit | 6.6 |
| Actual labor hours worked | 183,000 |
| Actual total labor costs | $4,020,000 |
| Actual and budgeted fixed overhead | $1,029,600 |
| Standard variable overhead rate | $24.50 per standard labor hour |
| Actual variable overhead costs | $4,520,000 |
Overhead is applied on standard labor hours.
The fixed factory overhead volume variance is
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