New Jersey Valve Company manufactured 8,600 units during January of a control valve used by milk processors in its Camden p Records indicated the following: Direct labor Direct material purchased Direct material used 43,800 hr. at $15.30 per hr. 31,000 lb. at $3.90 per lb. 25,600 lb. The control valve has the following standard prime costs: Direct material 3 lb. at $3.80 per lb. Direct labor 5 hr. at $15.70 per hr. Standard prime cost per unit $11.40 78.50 $89.90 Required: 1. Prepare a schedule of standard production costs for January, based on actual production of 8,600 units. 2. For the month of January, compute the following variances.
New Jersey Valve Company manufactured 8,600 units during January of a control valve used by milk processors in its Camden p Records indicated the following: Direct labor Direct material purchased Direct material used 43,800 hr. at $15.30 per hr. 31,000 lb. at $3.90 per lb. 25,600 lb. The control valve has the following standard prime costs: Direct material 3 lb. at $3.80 per lb. Direct labor 5 hr. at $15.70 per hr. Standard prime cost per unit $11.40 78.50 $89.90 Required: 1. Prepare a schedule of standard production costs for January, based on actual production of 8,600 units. 2. For the month of January, compute the following variances.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:New Jersey Valve Company manufactured 8,600 units during January of a control valve used by milk processors in its Camden plant.
Records indicated the following:
Direct labor
Direct material purchased
Direct material used
43,800 hr. at $15.30 per hr.
31,000 lb. at $3.90 per lb.
25,600 lb.
The control valve has the following standard prime costs:
Direct material 3 lb. at $3.80 per lb.
Direct labor
5 hr. at $15.70 per hr.
Standard prime cost per unit
$11.40
78.50
$89.90
Required:
1. Prepare a schedule of standard production costs for January, based on actual production of 8,600 units.
2. For the month of January, compute the following variances.
Transcribed Image Text:Required 1 Required 2
Prepare a schedule of standard production costs for January, based on actual production of 8,600 units.
NEW JERSEY VALVE COMPANY: CAMDEN PLANT
Schedule of Standard Production Costs
Based on 8,600 Units
For the Month of January
Direct material
Direct labor
Total standard production costs
Required 1 Required 2
Standard Costs
For the month of January, compute the following variances. (Indicate the effect of each variance by selecting "Favorable" or
"Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
Direct-material price variance
Direct-material quantity variance
Direct-material purchase price variance
Direct-labor rate variance
Direct-labor efficiency variance
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 3 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