The Koski Company has established standards as follows: Direct material 3.40 pounds at $5.40/pound = $18.36 per unit Direct labor 2.00 hours at $9.40/hour = $18.80 per unit Variable overhead 2.00 hours at $6.40/hour = $12.80 per unit Actual production figures for the past year were as follows: Units produced 640 Direct materials used 2,480 pounds Direct materials purchased (4,400 pounds) $24,200 Direct labor cost (1,090 hours) $10,646 Variable overhead cost incurred $6,867 Calculate the following: a. The materials price variance is _____. b. The material quantity variance is _____. c. The labor rate variance is _____.
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 Koski Company has established standards as follows:
Direct material 3.40 pounds at $5.40/pound = $18.36 per unit
Direct labor 2.00 hours at $9.40/hour = $18.80 per unit
Variable
Actual production figures for the past year were as follows:
Units produced 640
Direct materials used 2,480 pounds
Direct materials purchased (4,400 pounds) $24,200
Direct labor cost (1,090 hours) $10,646
Variable overhead cost incurred $6,867
Calculate the following:
a. The materials price variance is _____.
b. The material quantity variance is _____.
c. The labor rate variance is _____.
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