The following information is available from the cost records of a Company for the month of July, 2018 : (1) Material purchased (2) Material consumed (3) Actual wages paid for (4) Fixed Factory overhead incurred (5) Fixed Factory overhead budgeted (6) Units produced (7) Standard rates and prices are : $90,000 22,000 pieces 21,000 pieces 5,150 hours $25,750 $ 46,000 $42,000 1,900 $ 4.50 per piece 10 pieces per unit $ 6 per hour 2.5 hours per unit $ 8 per labour hour You are required to calculate : (i) Material price variance; (ii) Material usage variance; (iii) Direct material Standard input Direct labour rate Standard requirement Overhead Labour rate variance; (iv) Labour efficiency variance; (v) Fixed overhead expenditure 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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