Calculate the standard cost per unit. E12.19 (LO 1) Muhsin Company has gathered the following information about its product: Direct materials: Each unit of product contains 4.5 kg of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 kg. Materials cost $5 per kilogram, but Muhsin always takes the 2% cash discount that all of its suppliers offer. Freight costs average $0.25 per kilogram. Direct labour: Each unit requires two hours of labour. Set-up, cleanup, and downtime average 0.3 hours per unit. The average hourly pay rate of Muhsin's employees is $12. Payroll taxes and fringe benefits are an additional $3 per hour. Manufacturing overhead: Overhead is applied at a rate of $7 per direct labour hour. Instructions Calculate Muhsin's total standard cost per unit. Calculate materials, price, and quantity variances.
Calculate the standard cost per unit. E12.19 (LO 1) Muhsin Company has gathered the following information about its product: Direct materials: Each unit of product contains 4.5 kg of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 kg. Materials cost $5 per kilogram, but Muhsin always takes the 2% cash discount that all of its suppliers offer. Freight costs average $0.25 per kilogram. Direct labour: Each unit requires two hours of labour. Set-up, cleanup, and downtime average 0.3 hours per unit. The average hourly pay rate of Muhsin's employees is $12. Payroll taxes and fringe benefits are an additional $3 per hour. Manufacturing overhead: Overhead is applied at a rate of $7 per direct labour hour. Instructions Calculate Muhsin's total standard cost per unit. Calculate materials, price, and quantity variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please complete the following question thanks.
Transcribed Image Text:Calculate the standard cost per unit.
E12.19 (LO 1) Muhsin Company has gathered the following information about its
product:
Direct materials: Each unit of product contains 4.5 kg of materials. The average
waste and spoilage per unit produced under normal conditions is 0.5 kg. Materials
cost $5 per kilogram, but Muhsin always takes the 2% cash discount that all of its
suppliers offer. Freight costs average $0.25 per kilogram.
Direct labour: Each unit requires two hours of labour. Set-up, cleanup, and
downtime average 0.3 hours per unit. The average hourly pay rate of Muhsin's
employees is $12. Payroll taxes and fringe benefits are an additional $3 per hour.
Manufacturing overhead: Overhead is applied at a rate of $7 per direct labour
hour.
Instructions
Calculate Muhsin's total standard cost per unit.
Calculate materials, price, and quantity variances.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education