. Variable overhead rate. 2. Budgeted fixed overhead. 3. Normal capacity hours. 4. Applied factory overhead.
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.
Gillette Pvt Ltd. factory overhead rate is Rs. 3 per hour. Budgeted overhead for 3000 hours per
month is Rs.16000 and at 7000 hours is Rs.24000. Actual FOH for the month is Rs.18000 and
hactual volume is 5000 hours.
Required:
1. Variable overhead rate.
2. Budgeted fixed overhead.
3. Normal capacity hours.
4. Applied factory overhead.
5. Over or under applied factory overhead. What can be the possible reasons for the
over or under applied FOH? And what measures should company take to overcome
over applied FOH in future?
6. Spending Variance. What are the causes of unfavorable spending variance? And what
measures should company take to reduce unfavorable spending variance in future?
7. Idle Capacity Variance. What are the causes of unfavorable idle capacity variance? And
what measures should company take to reduce unfavorable idle capacity variance in
future?
Comment
You didnt answer my all questions please mention ans of 5,6,7 as well
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