COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following information relates to product A:Quantity / Unit Price Cost Per UnitMaterial (3kg @ RM23) RM69Labour (2 hours@RM20) RM40Budgeted production is 1, 000 units.Actual production is 900 units. Actual inputs were as follows: Material 2, 650 kg @ RM66, 250 Labour 1840 hours @ RM34, 960The material price variance is:
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RM5, 300 F
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RM4, 150 F
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RM5, 300 UF
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RM4, 150 UF
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Explanation:
Detailed explanation-1: -In general, three types of expenses are included in the cost of products: the cost of direct materials, direct labor costs and manufacturing overhead costs.
Detailed explanation-2: -A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service. Unit costs are synonymous with cost of goods sold (COGS).
Detailed explanation-3: -To find the unit cost, one would use the unit cost formula. The unit cost formula is: Cost per unit = variable cost + fixed costs / total units produced.
Detailed explanation-4: -Fixed cost = Total cost of production-(Variable cost per unit x number of units produced)
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