Warren Company manufactures pans. Below is the information related to its direct material costs: Standard amount of material used per pan 1.9 lb. Standard cost per lb $5.2 Actual amount of material used per pan 1.2 lb Actual cost per lb $4.5 Actual number of pans produced and sold 2,360 Warren’s direct material spending variance is $__________ Indicate the amount and whether it is Favorable or Unfavorable by placing F or U by amount, do not skip a space and do not use $ in your answer. For example, if your answer is $1,000 favorable, answer 1000F Selected Answer: 4,335 Correct Answer: 10,573 ± 2 (F)
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.
Can you show me how this is done? How do I know if it is favorable or unfavorable?
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Warren Company manufactures pans. Below is the information related to its direct material costs: Standard amount of material used per pan 1.9 lb. Actual amount of material used per pan 1.2 lb Actual cost per lb $4.5 Actual number of pans produced and sold 2,360
Warren’s direct material spending variance is $__________
Indicate the amount and whether it is Favorable or Unfavorable by placing F or U by amount, do not skip a space and do not use $ in your answer. For example, if your answer is $1,000 favorable, answer 1000F |
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