Thompson Company uses a standard cost system for its single product. The following data are available: Actual experience for the year: Purchases of raw materials (15,000 yards at $13): $ 195,000 Raw material used in production: 12,000 yards Direct labor costs (10,200 hours at $10): $ 102,000 Units produced: 12,600 Standards per unit of product: Raw materials: 1.1 yards at $15 per yard Direct labor: 8 hours at $9.50 per hour What is the labor rate variance for the year? What is the labor efficiency variance for 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.
Thompson Company uses a
What is the labor rate variance for the year?
What is the labor efficiency variance for the year?
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