Sit Down, Ltd. is a manufacturer that uses the following standards to produce a single unit of output of their product: Standard input per unit of output Standard price/rate per unit of input Direct materials 7.5 grams (g) $3.00 per g Direct labor 0.75 DL hours $16.50 per DL hour Variable Factory OH 0.75 DL hours $0.75 per DL hour Fixed Factory OH 0.75 DL hours $1.80 per DL hour During the past month, the company purchased and used 165,000 grams of direct materials at a total cost of $453,750 to produce 21,200 units of output. Direct labor costs for the month totaled $228,300 based on 12,720 direct labor hours worked. Variable factory overhead costs incurred totaled $10,100 and fixed factory overhead incurred was $22,500. Based on this information, the direct materials price variance for the month was:
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.
Sit Down, Ltd. is a manufacturer that uses the following standards to produce a single unit of output of their product:
|
|
Standard input per unit of output |
Standard price/rate per unit of input |
|
Direct materials |
7.5 grams (g) |
$3.00 per g |
|
Direct labor |
0.75 DL hours |
$16.50 per DL hour |
|
Variable Factory OH |
0.75 DL hours |
$0.75 per DL hour |
|
Fixed Factory OH |
0.75 DL hours |
$1.80 per DL hour |
During the past month, the company purchased and used 165,000 grams of direct materials at a total cost of $453,750 to produce 21,200 units of output. Direct labor costs for the month totaled $228,300 based on 12,720 direct labor hours worked. Variable
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