Doogan Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 2.0 grams $ 7.00 per gram Direct labor 0.5 hours $ 19.00 per hour Variable overhead 0.5 hours $ 5.00 per hour The company produced 4,700 units in January using 10,230 grams of direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 grams of the direct material at $7.20 per gram. The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $4.90 per hour. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for January is:
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.
Doogan Corporation makes a product with the following
| Standard Quantity or Hours | Standard Price or Rate | |||
|---|---|---|---|---|
| Direct materials | 2.0 | grams | $ 7.00 | per gram |
| Direct labor | 0.5 | hours | $ 19.00 | per hour |
| Variable overhead | 0.5 | hours | $ 5.00 | per hour |
The company produced 4,700 units in January using 10,230 grams of direct material and 2,210 direct labor-hours. During the month, the company purchased 10,800 grams of the direct material at $7.20 per gram. The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $4.90 per hour.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for January is:
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