Gordon Helps and Associates Company ltd makes two products.  Information regarding one of those products is given below:  Budgeted output /Sales for the year: 900 units Standard details for one unit Direct materials          40 square metres at $5.30 per square meter Direct wages               Bonding department : 24 hours at $5.00 per hour Finishing depart:        15 hours at $4.80 per hour Variable overhead      $1.50 per bonding labour hour                                     $1 per finishing labour hour Fixed production overhead $36,000 Fixed non-production overhead $27,000 Note:  Variable overheads are recovered (absorbed) using hours, fixed overheads arerecovered on a unit basis   Required: a.      Prepare a standard cost card for one unit and enter on the standard cost card the following subtotals:                            i.          Prime cost                                                                                                ii.          Variable production cost                                                                       iii.          Total production cost                                                                             iv.          Total cost                                                                         b.     Calculate the selling price per unit allowing for a profit of 25% of the selling price.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Gordon Helps and Associates Company ltd makes two products.  Information regarding one of those products is given below: 

Budgeted output /Sales for the year: 900 units

Standard details for one unit

Direct materials          40 square metres at $5.30 per square meter

Direct wages               Bonding department : 24 hours at $5.00 per hour

Finishing depart:        15 hours at $4.80 per hour

Variable overhead      $1.50 per bonding labour hour

                                    $1 per finishing labour hour

Fixed production overhead $36,000

Fixed non-production overhead $27,000

Note:  Variable overheads are recovered (absorbed) using hours, fixed overheads arerecovered on a unit basis

 

Required:

a.      Prepare a standard cost card for one unit and enter on the standard cost card the following subtotals:

                           i.          Prime cost                                                                      

                         ii.          Variable production cost                                               

                       iii.          Total production cost                                                     

                       iv.          Total cost                                                                        

b.     Calculate the selling price per unit allowing for a profit of 25% of the selling price.                                                                        

 

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