Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows: Standard Quantity/Hours Standard Price/Rate Standard Cost per Bag Direct Material 25 pounds ₱ 0.75 ₱18.75 Direct Labor 0.25 hours ₱69.00 ₱17.30 Variable overhead 0.25 hours ₱24.00 ₱ 6.00 Total ₱42.05 The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company: Production of Fastgro: 23,000 bags Direct materials purchased: 585,000 pounds at a cost of ₱436,250 Direct labor worked: 5,800 hours at a cost of ₱397,300 Variable overhead incurred: ₱140,650 Inventory of direct materials on January 31: 8,000 pounds Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet. The variable manufacturing overhead flexible budget/spending variance amounts to ₱_____________. The materials price variance amounts to ₱_____________. The labor efficiency variance amounts to ₱_____________.
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.
Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed
|
Standard Quantity/Hours |
Standard Price/Rate |
Standard Cost per Bag |
|
|
Direct Material |
25 pounds |
₱ 0.75 |
₱18.75 |
|
Direct Labor |
0.25 hours |
₱69.00 |
₱17.30 |
|
Variable overhead |
0.25 hours |
₱24.00 |
₱ 6.00 |
|
Total |
₱42.05 |
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company:
- Production of Fastgro: 23,000 bags
- Direct materials purchased: 585,000 pounds at a cost of ₱436,250
- Direct labor worked: 5,800 hours at a cost of ₱397,300
- Variable overhead incurred: ₱140,650
- Inventory of direct materials on January 31: 8,000 pounds
Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet.
The variable manufacturing overhead flexible
The materials price variance amounts to ₱_____________.
The labor efficiency variance amounts to ₱_____________.
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