You are the management accountant of T Ltd. The following computer printout shows details relating to April: Sales volume Selling price per unit Production volume Direct materials Kilograms Price per kilogram Direct labour Hours per unit Rate per hour Fixed overhead Production Administration Actual 4 900 units R150 5 400 units 10 600 R6 0.55 R114 R103 000 R31 000 735000 Budget 5 000 units R140 5 000 units 10 000 R5 0.50 R120 R100 000 R30 000 T Ltd uses a standard costing absorption costing system. There was no beginning or ending work. process. Required: Calculate the direct materials price and usage variances. Calculate the direct labour rate and efficiency variances. Calculate all fixed overhead variances. (150+40) ung t 4 D C 10 10 unft
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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