Linis Company produces a commercial cleaning compund known as Zide. The direct materials and direct labor standards for one unit of Zide are as follows: Standard Qty Standard price Sandard cost Direct materials 4.6 lbs P2.50/lb. P11.50 Direct labor 0.2 hr. P35/hr. 7.00 During the most recent month, the following activity was recorde: Twenty thousand pounds of material were purchased at a cost of P2.35 per pound. All of the materials, purchased was usedd to produce 4,000 units of Zide. 750 hours of direct labor time were recorded at a total labor cost of P30,375. Compute for the direct labor efficiency variance. Indicate whether favorable or unfavorable.
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.
Linis Company produces a commercial cleaning compund known as Zide. The direct materials and direct labor standards for one unit of Zide are as follows:
Standard Qty Standard price Sandard cost
Direct materials 4.6 lbs P2.50/lb. P11.50
Direct labor 0.2 hr. P35/hr. 7.00
During the most recent month, the following activity was recorde:
- Twenty thousand pounds of material were purchased at a cost of P2.35 per pound.
- All of the materials, purchased was usedd to produce 4,000 units of Zide.
- 750 hours of direct labor time were recorded at a total labor cost of P30,375.
Compute for the direct labor efficiency variance. Indicate whether favorable or unfavorable.
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