conditions are favorable or unfavorable.
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.
Answer the following items on the space provided. Show your computations.
At the beginning of 201A, ABC Company had the following
Direct material (3 pounds at P3.20) P9.60
Labor standard (0.9 hours at P9.00) 8.10
Variable
Fixed overhead (0.9 hours at P4.00) 3.60
Total P22.65
ABC computes its overhead rates using budgeted capacity, which is 144,000 units. Actual results for 201A
are:
Units produced 140,000 units
Materials purchased 421,175 lbs. at P3.30
Materials used 421,000 lbs.
Direct labor 128,750 hrs at P8.90
Fixed overhead P517,525
Variable overhead 218,000
Required: Indicate whether conditions are favorable or unfavorable.
7. VOH efficiency variance
8. Fixed overhead (FOH) spending variance
9. FOH volume variance
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