2.0 Question: 2.0Bolsa Corporation produces high-quality leather belts. The company's plant in Boise uses astandard costing system and has set the following standards for materials and labor:Leather (4 strips @ $5.00)$20.00Direct labor (0.25 hr. @ $11.00) 2.75Total prime cost$22.75During the first month of the year, Boise plant produced 30,000 belts. Actual leatherpurchased was 130,000 strips at $3.00 per strip. There were no beginning or endinginventories of leather. Actual direct labor was 35,000 hours at $13.50 per hour.Compute the costs of leather and direct labor that should be incurred for the production of30,000 leather belts.

Step 1:Standard cost is the cost which is set by organisation that should be incurred, if there is…

Answered: Question: 2.0 Bolsa Corporation…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 39E

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Question: 2.0 Bolsa Corporation produces high-quality leather belts. The company's plant in Boise uses a standard costing system and has set the following standards for materials and labor: Leather (4 strips @ $5.00) $20.00 Direct labor (0.25 hr. @ $11.00) 2.75 Total prime cost $22.75 During the first month of the year, Boise plant produced 30,000 belts. Actual leather purchased was 130,000 strips at $3.00 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 35,000 hours at $13.50 per hour. Compute the costs of leather and direct labor that should be incurred for the production of 30,000 leather belts.
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