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Cost Accounting Formulae
COST ACCOUNTING FORMULAS & IMPORTANT TERMINOLOGIES 1. 2. 3. 4. Prime Cost =...
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Recording of material and its variances:
Method No.1:
1Raw material
Std. cost
DebitMaterial price variance
Unfav
DebitMaterial price variance
Fav
CreditAccount payable
Actual cost
Credit2Work in process
Std. cost
DebitMaterial quantity variance
Unfav
DebitMaterial quantity variance
Fav
CreditRaw material
Actual cost
Credit
Method No.2:
1Raw material
Actual cost
DebitAccount payable
Actual cost
Credit2Work in process
Std. cost
DebitMaterial price variance
Unfav
DebitMaterial quantity variance
Unfav
DebitMaterial quantity variance
Fav
CreditMaterial price variance
Fav
CreditRaw material
Actual cost
Credit
Recording of Labour and its variances:
Method No.1:
1PayrollActual costDebitAccured payrolActual costCredit
2Work in processStd. costDebitLabor rate varianceunfavDebitLabor hours varianceunfavDebitLabor rate varianceFavCreditLabor hours varianceFavCreditPayrollActual costCredit
Recording of Factory overhead and its variances:
Two Variance Method
1Factory overhead controlActual costDebitVarious creditsActual costCredit2Work in process (Std. hours allowed x total FOH rate)Factory overhead control(Std. hours allowed x total FOH rate)3FOH Controllable varianceunfavDebitFOH Volume varianceunfavDebitFOH Controllable varianceFavCreditFOH Volume varianceFavCreditFactory overhead controlCreditNote: The amount in FOH control account will be closed in entry no2 and 3 and ano amount in FOH control account
Three Variance Method
1Factory overhead controlActual costDebitVarious creditsActual costCredit2Work in process (Std. hours allowed x total FOH rate)FOH Efficiency varianceunfavFOH Efficiency variancefavFactory overhead control(Actual hours x total FOH rate)3FOH Spending varianceunfavDebit
FOH Idle capacity varianceunfavDebitFOH Spending variancefavCreditFOH Idle capacity variancefavCreditFactory overhead control(Bal. figure)CreditNote: The amount in FOH control account will be closed in entry no2 and 3 and ano amount in FOH control account
Four Variance Method
1Factory overhead controlActual costDebitVarious creditsActual costCredit2Work in process (Std. hours allowed x total FOH rate)FOH Fixed efficiency varianceunfavFOH Variable efficiency varianceunfavFOH Fixed efficiency variancefavFOH Variable variancefavFactory overhead control(Actual hours x total FOH rate)3FOH Spending varianceunfavDebitFOH Idle capacity varianceunfavDebitFOH Spending variancefavCreditFOH Idle capacity variancefavCreditFactory overhead control(Bal. figure)CreditNote: The amount in FOH control account will be closed in entry no2 and 3 and ano amount in FOH control account
Format of Entries of Material Mix and Material Yeild Va
1On purchase of materialRaw materialStd. costDebitMaterial Price varianceunfavDebitMaterial Price varianceFavCreditAccount payableActual costCredit2To material charge to production
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Format of Entries of Standard Costing-Chap 20
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| Upload Date: | 11/25/2009 |
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