Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour hours being needed. A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of direct material B and three metres of direct material C are needed. Direct material A costs $1 per kilogram, direct material B $2 per litre and direct material C $3 per metre. Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled) hour. A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour (skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are $250,000 and budgeted production of the joe is 5,000 units. Administration, selling and distribution overheads are added to products at the rate of $10 per unit. A mark-up of 25% is made on the joe. Required Using the above information, draw up a standard cost card for the joe.
Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour hours being needed. A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of direct material B and three metres of direct material C are needed. Direct material A costs $1 per kilogram, direct material B $2 per litre and direct material C $3 per metre. Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled) hour. A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour (skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are $250,000 and budgeted production of the joe is 5,000 units. Administration, selling and distribution overheads are added to products at the rate of $10 per unit. A mark-up of 25% is made on the joe. Required Using the above information, draw up a standard cost card for the joe.
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 2PA: Five Card Draw manufactures and sells 24,000 units of Diamonds, which retails for $180, and 27,000...
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![Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled
and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many
skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour
hours being needed.
A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of
direct material B and three metres of direct material C are needed. Direct material A costs $1 per
kilogram, direct material B $2 per litre and direct material C $3 per metre.
Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled)
hour.
A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour
(skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are
$250,000 and budgeted production of the joe is 5,000 units.
Administration, selling and distribution overheads are added to products at the rate of $10 per unit.
A mark-up of 25% is made on the joe.
Required
Using the above information, draw up a standard cost card for the joe.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F46120c1c-bcdd-4498-b47a-37361c92c085%2F05ec4b3a-5c2b-49b1-94c2-621aee279c1f%2Fglmoe1l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bloggs makes one product, the joe. Two types of labour are involved in the preparation of a joe, skilled
and semi-skilled. Skilled labour is paid $10 per hour and semi-skilled $5 per hour. Twice as many
skilled labour hours as semi-skilled labour hours are needed to produce a joe, four semi-skilled labour
hours being needed.
A joe is made up of three different direct materials. Seven kilograms of direct material A, four litres of
direct material B and three metres of direct material C are needed. Direct material A costs $1 per
kilogram, direct material B $2 per litre and direct material C $3 per metre.
Variable production overheads are incurred at Bloggs Co at the rate of $2.50 per direct labour (skilled)
hour.
A system of absorption costing is in operation at Bloggs Co. The basis of absorption is direct labour
(skilled) hours. For the forthcoming accounting period, budgeted fixed production overheads are
$250,000 and budgeted production of the joe is 5,000 units.
Administration, selling and distribution overheads are added to products at the rate of $10 per unit.
A mark-up of 25% is made on the joe.
Required
Using the above information, draw up a standard cost card for the joe.
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