The standard cost sheet for a product is shown. Standard Cost Manufacturing Costs Standard price Standard Quantity per unit Direct materials $4.50 per pound 5.70 pounds $ 25.65 Direct labor $11.87 per hour 2.00 hours $ 23.74 Overhead $2.20 per hour 2.00 hours $ 4.40 $ 53.79 The company produced 3,000 units that required: • 17,600 pounds of material purchased at $4.35 per pound • 5,910 hours of labor at an hourly rate of $12.17 per hour • Actual overhead in the period was $13,540 Fill in the Budget Performance Report for the period. Some amounts are provided. Round your answers to the n Budget Performance Report Variance Manufacturing Costs: Actual Standard (Favorable)/ 3,000 units Costs Costs Unfavorable Direct materials $76,560 Direct labor 71,220 Overhead 13,540 $655 %24
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.
Budget performance report in the business shows comparison of actual costs of the product with standard costs. Variance can be favourable or unfavourable, it depends on the costs increase or decrease.
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