Variable manufacturing overhead costs incurred Variable manufacturing overhead cost rate Fixed manufacturing overhead costs incurred Fixed manufacturing overhead costs budgeted Denominator level in machine-hours $537,470 $7 per standard machine-hour $146,101 $136,000 68,000 Standard machine-hour allowed per unit of output Units of output 1.2 66,500 Actual machine-hours used 75,700 Ending work-in-process inventory 1. Prepare an analysis of all manufacturing overhead variances. Use the 4-variance analysis framework illustrated in Exhibit 8-4 (page 304). 2. Prepare journal entries for manufacturing overhead costs and their variances. 3. Describe how individual variable manufacturing overhead items are controlled from day to day. 4. Discuss possible causes of the variable manufacturing overhead variances. Required
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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