Correct answer The Ford Company developed the following standardsfor the manufacture of its product: Each unit shouldhave 4.8 pounds of direct materials purchased at $14per pound. Each unit should be produced in 3.5 hoursat a direct labor cost of $45 per hour. Actual productionwas 54,300 units using 174,300 pounds of directmaterials at a total cost of $1,960,300 and required124,400 direct labor hours at a total cost of $2,110,500.What was the direct labor "cost" variance?

Explanation of Standard Labor Cost:Standard labor cost refers to the predetermined cost of direct…

Answered: The Ford Company developed the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

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Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...

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Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per unit. What is the cost of each unit produced?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
To make a batch of 1,000 units of a certain item, it is estimated that 120 direct labor hours are required at a cost of $10/hour. Direct material costs are estimated at $1,500 per batch. The overhead costs are calculated based on an overhead rate of $7.50 per direct labor hour. The item can be readily purchased from a local vendor for $4 per unit. a. Should the item be made or purchased? b. Over what range of overhead rate is your answer in part a valid?
Operating at a normal level of 30,000 direct labor-hours, Lasser Company produces 10,000 units of product each period. The direct labor wage rate is $12 per hour. Two and one-half yards of direct materials gointo each unit of product; the material costs $8.60 per yard. Variable manufacturing overhead should be$1.90 per standard direct labor-hour. Fixed manufacturing overhead should be $168,000 per period.Required:1. Using 30,000 direct labor-hours as the denominator activity, compute the predetermined overhead rateand break it down into variable and fixed elements.2. Complete the standard cost card below for one unit of product:Direct materials, 2.5 yards at $8.60 per yard ......................... $21.50Direct labor, ? ........................................................................ ?Variable manufacturing overhead, ? ...................................... ?Fixed manufacturing overhead, ? .......................................... ?Total standard cost per unit…
Richard Inc. expects to sell 28,000 units. Each unit requires 4 pounds of direct materials at $15 per pound and 3 direct labor hours at $12 per direct labor hour. The overhead rate is $9 per direct labor hour. The beginning inventories are as follows: direct materials, 2,500 pounds; finished goods, 3,100 units. The planned ending inventories are as follows: direct materials, 4,000 pounds; finished goods, 3,200 units. What is the planned production?
The following information is provided The per-unit standards are 2 pounds at $5 per pound. Last month, 11,200 pounds of direct materials that actually cost $53,200 were used to produce 6,000 units of product. Direct Materials: The per-unit standards are 0.5 direct labor hours at $15 per hour. In producing 6,000 units, the actual direct labor cost was $46,500 for 3,000 direct labor hours worked. Direct Labour: Required: a. Compute the Materials Price Variance b. Compute the Materials Quantity Variance c. Compute the Labour Rate Variance d. Compute the Labour Quantity Variance
A Company combines three types of materials to produce its product. For a 100-kilo batch, the standard cost for materials are as follows: Standard Quantity 60 kilos 36 kilos Standard Price Total Materials A Materials B P5.00 4.00 P300 144 24 kilos 120 kilos Materials C 3.00 72 P516 During August, the company produced 200 batches or 20,000 kilos of its product. Materials used for this production were: Quantity 12,600 kls 7,300 kls 4.700 kls 24,600 kilos Price Total Materials A Materials B P4.80 4.10 3.40 P60,480 P29,930 15.980 P106,390 Materials C Compute for the Materials Variance involving several materials combined in the production process.
Direct Materials Inventories are kept in pounds for Walter Company, and the total pounds needed for production is 55,000. If the beginning inventory is 14,000 pounds and the desired ending inventory is 10,500 pounds, how many total pounds should be purchased?

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