ABC Company has established standard costs for the furniture department, in which one (1) size of the cabinet is made. The standard costs of producing one (1) of these cabinets are shown below: Direct material (Lumber) 50 board feet at P4.00 per foot Labor standard P200.00 8 hours at P10.00 per hour Variable overhead 80.00 8 hours at P5.00 per hour 40.00 Fixed overhead 8 hours at P3.00 per hour 24.00 P344.00 Total During January 201A, 500 cabinets were produced. The actual cost of operations during the month are shown below: Direct materials purchased (30,000 board feet at P4.10 per board foot) Direct materials used (24,000 board feet) Direct labor (4,200 hours at P9.50 per hour) Total variable overhead cost P123,000 39,900 22,000 11,000 Total fixed overhead cost The budgeted overhead for the furniture department based on a normal monthly activity of 4,500 hours is P36.000, of which P22.500 is variable and P13.500 is fixed overhead.
ABC Company has established standard costs for the furniture department, in which one (1) size of the cabinet is made. The standard costs of producing one (1) of these cabinets are shown below: Direct material (Lumber) 50 board feet at P4.00 per foot Labor standard P200.00 8 hours at P10.00 per hour Variable overhead 80.00 8 hours at P5.00 per hour 40.00 Fixed overhead 8 hours at P3.00 per hour 24.00 P344.00 Total During January 201A, 500 cabinets were produced. The actual cost of operations during the month are shown below: Direct materials purchased (30,000 board feet at P4.10 per board foot) Direct materials used (24,000 board feet) Direct labor (4,200 hours at P9.50 per hour) Total variable overhead cost P123,000 39,900 22,000 11,000 Total fixed overhead cost The budgeted overhead for the furniture department based on a normal monthly activity of 4,500 hours is P36.000, of which P22.500 is variable and P13.500 is fixed overhead.
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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