Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits for the next four quarters. Direct materials are 4 ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 850 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Grady desires a balance of 200 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.20 per kit, and fixed overhead is $165 per quarter. Prepare year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. direct materials budget, direct labor budget, and manufacturing overhead budget for the

Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits for the next four quarters. Direct materials are 4 ounces of plastic per kit and the plastic costs $1 per ounce. Indirect materials are considered insignificant and are not included in the budgeting process. Beginning Raw Materials Inventory is 850 ounces, and the company desires to end each quarter with 10% of the materials needed for the next quarter's production. Grady desires a balance of 200 ounces in Raw Materials Inventory at the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an average cost of $10 per hour. Manufacturing overhead is allocated using direct labor hours as the allocation base. Variable overhead is $0.20 per kit, and fixed overhead is $165 per quarter. Prepare year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. direct materials budget, direct labor budget, and manufacturing overhead budget for the

Name: I need help with this problem. Please explain how you get your figures
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Description: I need help with this problem. Please explain how you get your figures. Especially the direct materials cost per ounce amount. Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600kits for the next four quarte

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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I need help with this problem. Please explain how you get your figures. Especially the direct materials cost per ounce amount.

Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600
kits for the next four quarters
Direct materials are 4 ounces of plastic per kit and the plastic costs $1 per ounce.
Indirect materials are considered insignificant and are not included in the budgeting
process. Beginning Raw Materials Inventory is 850 ounces, and the company
desires to end each quarter with 10% of the materials needed for the next quarter's
production. Grady desires a balance of 200 ounces in Raw Materials Inventory at
the end of the fourth quarter. Each kit requires 0.10 hours of direct labor at an
average cost of $10 per hour. Manufacturing overhead is allocated using direct
labor hours as the allocation base. Variable overhead is $0.20 per kit, and fixed
overhead is $165 per quarter.
direct materials budget, direct labor budget, and manufacturing overhead budget for the
Prepare
year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined
overhead allocation rate to two decimal places. Round other amounts to the nearest whole number.

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