solve a and b. Fine Lumber Inc. mills and finishes furniture kits. A certain kit requires the following: Direct materials standard: 2 square yards at $13.50 per yard Direct manufacturing labor standard: 1.5 hours at $20.00 per hour During the third quarter, the company made 1,500 kits and used 3,150 square yards of wood costing $42,600. Direct labor totaled 2,100 hours for $46,150. Required: a.Use a worksheet to compute the following variances and indicate whether each variance is favorable or unfavorable: direct materials price and efficiency variances for the quarter, and b. direct manufacturing labor price and efficiency variances for the quarter.
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.
solve a and b.
Fine Lumber Inc. mills and finishes furniture kits. A certain kit requires the following:
Direct materials standard: 2 square yards at $13.50 per yard
Direct manufacturing labor standard: 1.5 hours at $20.00 per hour
During the third quarter, the company made 1,500 kits and used 3,150 square yards of wood costing $42,600. Direct labor totaled 2,100 hours for $46,150.
Required:
a.Use a worksheet to compute the following variances and indicate whether each variance is favorable or unfavorable: direct materials price and efficiency variances for the quarter, and
b. direct manufacturing labor price and efficiency variances for the quarter.
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