The Normal Corporation accounts for the cost of its single product using a standard cost approach. The following was the standard cost per unit (based on 10,000 units produced): direct materials, 10 kg At P11/kg; direct labour, 8 hours @ P50 per day; factory overhead, 8 hours @ P15 per hour. Units finished throughout the month, 8,000; devices in progress at the end of the month, with 100% components but half done, 1,000; direct materials used, 95,000 kgs @ P10 per kg; direct labour, P3,510,000 at a cost of P54; actual cost for the fortnight, P985,000 Calculate the variation in variable efficiency. Determine if the situation is positive or negative
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 Normal Corporation accounts for the cost of its single product using a
Calculate the variation in variable efficiency. Determine if the situation is positive or negative.
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