A manufactured product has the following information for August. Standard ActualDirect materials2 lbs. per unit @ $2.50 per lb. Direct labor0.5 hours per unit @ $16 per hour Overhead$12 per direct labor hour Units manufactured 12,000 Total manufacturing costs $225,400 (1) Compute the standard cost per unit.(2) Compute the total budgeted cost for production in August.(3) Compute the total cost variance for August.

Working Notes: 1. Direct materials = lbs. per unit * rate per lb =(2 lbs * $2.5) = $5 2. Direct…

Answered: A manufactured product has the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A manufactured product has the following information for August.

	Standard	Actual
Direct materials	2 lbs. per unit @ $2.50 per lb.
Direct labor	0.5 hours per unit @ $16 per hour
Overhead	$12 per direct labor hour
Units manufactured			12,000
Total manufacturing costs		$	225,400

(1) Compute the standard cost per unit.
(2) Compute the total budgeted cost for production in August.
(3) Compute the total cost variance for August.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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