Each finished guitar contains seven pounds of veneered wood. In addition, one pound of wood is typically wasted in the production process. The veneered wood used in the guitars has a standard price of $14 per pound. The other parts needed to complete each guitar, such as the bridge and strings, cost $17 per guitar. The labor standards for Springsteen’s two production departments are as follows: Construction Department: 5 hours of direct labor at $21 per hour Finishing Department: 3 hours of direct labor at $17 per hour The following pertains to the month of July. 1. There were no beginning or ending work-in-process inventories in either production department. 2. There was no beginning finished-goods inventory. 3. Actual production was 510 guitars, and 310 guitars were sold on account for $405 each. 4. The company purchased 6,100 pounds of veneered wood at a price of $14.50 per pound. 5. Actual usage of veneered wood was 4,600 pounds of the wood purchased during July. 6. Enough parts (bridges and strings) to finish 610 guitars were purchased at a cost of $9,010. 7. The Construction Department used 2,400 direct-labor hours. The total direct-labor cost in the Construction Department was $48,000. 8. The Finishing Department used 1,580 direct-labor hours. The total direct-labor cost in that department was $28,440. 9. There were no direct-material variances in the Finishing Department. Required: 1-a. Prepare a schedule that computes the standard costs of direct material in each production department. 1-b. P
Each finished guitar contains seven pounds of veneered wood. In addition, one pound of wood is typically wasted in the production process. The veneered wood used in the guitars has a standard price of $14 per pound. The other parts needed to complete each guitar, such as the bridge and strings, cost $17 per guitar. The labor standards for Springsteen’s two production departments are as follows:
Construction Department: 5 hours of direct labor at $21 per hour
Finishing Department: 3 hours of direct labor at $17 per hour
The following pertains to the month of July.
1. There were no beginning or ending work-in-process inventories in either production department.
2. There was no beginning finished-goods inventory.
3. Actual production was 510 guitars, and 310 guitars were sold on account for $405 each.
4. The company purchased 6,100 pounds of veneered wood at a price of $14.50 per pound.
5. Actual usage of veneered wood was 4,600 pounds of the wood purchased during July.
6. Enough parts (bridges and strings) to finish 610 guitars were purchased at a cost of $9,010.
7. The Construction Department used 2,400 direct-labor hours. The total direct-labor cost in the Construction Department was $48,000.
8. The Finishing Department used 1,580 direct-labor hours. The total direct-labor cost in that department was $28,440.
9. There were no direct-material variances in the Finishing Department.
Required:
1-a. Prepare a schedule that computes the
1-b. Prepare a schedule that computes the standard costs of direct labor in each production department.
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