Gerald/Brooke, Ltd., manufactures shirts, which it sells to customers for embossing with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Quantity Standard Cost Direct materials Direct labor Variable overhead Fixed overhead $1.55 per yard $13.00 per DLH $3.60 per DLH $6.00 per DLH 1.20 yards 0.30 DLH 0.30 DLH 0.30 DLH $1.86 3.90 1.08 1.80 $8.64 The annual budgets were based on the production of 1,117,000 shirts, using 335,100 direct labor hours. Due to slight seasonal demands, the company plans to produce 89,360 shirts per month, January through August, and 100,530 shirts per month, September through December. A) What monthly fixed overhead volume variance does management expect between January and August? Between September and December? At the end of the year?
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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