Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The materials price variance for the firm during that period was: $700.00 favorable $210.00 favorable $310.00 favorable $390.00 unfavorable $210.00 unfavorable The materials quantity (usage) variance for the firm during that period was: $1090.00 favorable $310.00 favorable $700.00 favorable $390.00 unfavorable $210.00 unfavorabl
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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