Jericho Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Line Item Description Value Standard number of lbs. of brass 1.3 lbs. Standard price per lb. of brass $11.50 Standard wage per hour $10.80 Standard labor time per unit 20 min. Actual price per lb. of brass $11.75 Actual lbs. of brass used during the week 12,051 lbs. Number of units produced during the week 9,000 Actual wage per hour $11.12 Actual hours for the week (50 employees × 36 hours) 1,800 Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Line Item Description Cost per Unit Direct materials standard cost per unit $fill in the blank 1 Direct labor standard cost per unit $fill in the blank 2 Total standard cost per unit $fill in the blank 3 b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Direct Materials Price Variance $fill in the blank 4 Direct Materials Quantity Variance $fill in the blank 6 Total Direct Materials Cost Variance $fill in the blank 8 c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Line Item Description Amount Variance Direct Labor Rate Variance $fill in the blank 10 Direct Labor Time Variance $fill in the blank 12 Total Direct Labor Cost Variance $fill in the blank 14
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Jericho Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
| Line Item Description | Value |
|---|---|
| Standard number of lbs. of brass | 1.3 lbs. |
| Standard price per lb. of brass | $11.50 |
| Standard wage per hour | $10.80 |
| Standard labor time per unit | 20 min. |
| Actual price per lb. of brass | $11.75 |
| Actual lbs. of brass used during the week | 12,051 lbs. |
| Number of units produced during the week | 9,000 |
| Actual wage per hour | $11.12 |
| Actual hours for the week (50 employees × 36 hours) | 1,800 |
Required:
a. Determine the
| Line Item Description | Cost per Unit |
|---|---|
| Direct materials standard cost per unit | $fill in the blank 1 |
| Direct labor standard cost per unit | $fill in the blank 2 |
| Total standard cost per unit | $fill in the blank 3 |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Line Item Description | Amount | Variance |
|---|---|---|
| Direct Materials Price Variance | $fill in the blank 4 |
|
| Direct Materials Quantity Variance | $fill in the blank 6 |
|
| Total Direct Materials Cost Variance | $fill in the blank 8 |
|
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Line Item Description | Amount | Variance |
|---|---|---|
| Direct Labor Rate Variance | $fill in the blank 10 |
|
| Direct Labor Time Variance | $fill in the blank 12 |
|
| Total Direct Labor Cost Variance | $fill in the blank 14 |
|
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