The normal capacity of the Cutting Department is 12,000 machine hours per month. At normal capacity, the standard factory overhead rate is 12.50 per machine hour based on 96,000 budgeted fixed costs per month and a variable cost rate of 4.50 per machine hour. During May, the department operated at 12,500 machine hours, with an actual factory overhead of 166,000. The number of standard machine-hours allowed for the production actually attained is 11,000. The controllable variance and volume variance, respectively, are A. 20,500 U and 8,000 F B. 20,500 F and 8,000 F C. 20,500 F and 8,000 U D. 20,500 U and 8,000 U
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.
The normal capacity of the Cutting Department is 12,000 machine hours per month. At normal capacity, the standard factory
The controllable variance and volume variance, respectively, are
A. 20,500 U and 8,000 F
B. 20,500 F and 8,000 F
C. 20,500 F and 8,000 U
D. 20,500 U and 8,000 U
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