Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Chapter 8, Problem 10E
Standard unit cost and
The normal capacity of Algonquin Adhesives Inc. is 40,000 direct labor hours and 20,000 units per month. A finished unit requires 6 lb of materials at an estimated cost of $2 per pound. The estimated cost of labor is $10.00 per hour. The plant estimates that
During the month of March, the plant totaled 34,800 direct labor hours at an average rate of $9.50 an hour. The plant produced 18,000 units, using 105,000 lb of materials at a cost of $2.04 per pound.
- 1. Prepare a
standard cost summary showing the standard unit cost. - 2. Make journal entries to charge materials and labor to Work in Process.
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The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the
upcoming fiscal year:
2nd Quarter
1st Quarter
10,400
3rd Quarter
11,400
4th Quarter
12,400
Units to be produced
9,400
Each unit requires 0.25 direct labor-hours and direct laborers are paid $12.00 per hour.
In addition, the variable manufacturing overhead rate is $1.70 per direct labor-hour. The fixed manufacturing overhead is $84,000 per
quarter. The only noncash element of manufacturing overhead is depreciation, which is $24,000 per quarter.
Required:
1. Calculate the company's total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a
whole.
2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead
for each quarter of the upcoming fiscal year and for the year as a whole.
The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the
upcoming fiscal year:
1st Quarter
3rd Quarter
12,400
4th Quarter
13,400
2nd Quarter
Units to be produced
11,400
10,400
Each unit requires 0.30 direct labor-hours and direct laborers are paid $12.50 per hour.
In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $94,000 per
quarter. The only noncash element of manufacturing overhead is depreciation, which is $34,000 per quarter.
Required:
1. Calculate the company's total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a
whole.
2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead
for each quarter of the upcoming fiscal year and for the year as a whole.
Complete this question by entering your answers in the tabs below.
Req 1…
Determining Overhead Rate; Normal Capacity Method. Desmond Corp. estimates that its production for the coming year will be 10,000 widgets, which is 80% of normal capacity, with the following unit costs: materials, $40; direct labor, $60. Direct labor is paid at the rate of $24 per hour. The widget shaper, the most expensive piece of machinery, must be run for 20 minutes to produce one widget. Total estimated overhead is expected to consist of $400,000 for variable overhead and $400,000 for fixed overhead.
Required: Compute the overhead rate for each of the following bases, using the normal capacity activity level:
(1) physical output
Chapter 8 Solutions
Principles of Cost Accounting
Ch. 8 - How does a standard cost accounting system work,...Ch. 8 - What is the difference between the standard cost...Ch. 8 - Prob. 3QCh. 8 - What are the specific procedures on which a...Ch. 8 - How are standards for materials and labor costs...Ch. 8 - What is a variance?Ch. 8 - How do price and quantity variances relate to...Ch. 8 - How do rate and efficiency variances relate to...Ch. 8 - Prob. 9QCh. 8 - How does a materials purchase price variance...
Ch. 8 - Prob. 11QCh. 8 - Prob. 12QCh. 8 - When a company uses a standard cost system, are...Ch. 8 - What two factors must be considered when breaking...Ch. 8 - What might cause the following materials...Ch. 8 - What might cause the following labor variances?
An...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - When does a flexible-budget variance occur?
Ch. 8 - Why is it important to determine flexible-budget...Ch. 8 - Prob. 23QCh. 8 - What is the significance of a production-volume...Ch. 8 - If production is more or less than the standard...Ch. 8 - At the end of the current fiscal year, the trial...Ch. 8 - What variances from the four-variance method are...Ch. 8 - What is the primary difference between the...Ch. 8 - What are the four variances in the four-variance...Ch. 8 - In all of the exercises involving variances, use F...Ch. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Computing materials variances D-List Calendar Co....Ch. 8 - Computing labor variances LIFT Inc. manufactures...Ch. 8 - Standard cost summary; materials and labor cost...Ch. 8 - Computing labor variances Fill in the missing...Ch. 8 - Standard unit cost and journal entries The normal...Ch. 8 - Making journal entries Assume that during the...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Using variance analysis and interpretation Last...Ch. 8 - Journalizing standard costs in two departments...Ch. 8 - Calculating factory overhead The standard capacity...Ch. 8 - Determining Budgeted Overhead The overhead...Ch. 8 - Calculating factory overhead: two variances Munoz...Ch. 8 - Calculating factory overhead: two variances...Ch. 8 - The normal capacity of a manufacturing plant is...Ch. 8 - Calculating amount of factory overhead applied to...Ch. 8 - Georgia Gasket Co. budgets 8,000 direct labor...Ch. 8 - (Appendix) Calculating factory overhead: four...Ch. 8 - (Appendix) Calculating factory overhead: three...Ch. 8 - Materials and labor variances Branca Inspections...Ch. 8 - Materials and labor variances Fausto Fabricators...Ch. 8 - Zippy Inc. manufactures a fuel additive, Surge,...Ch. 8 - Calculation of materials and labor variances
Fritz...Ch. 8 - High-End Products Inc. uses a standard cost system...Ch. 8 - RDI Products Co. manufactures a variety of...Ch. 8 - The standard cost summary for the most popular...Ch. 8 - Carlo Lee Corp. has established the following...Ch. 8 - USD Inc. has established the following standard...Ch. 8 - Allocation of variances
Costa Brava Manufacturing...Ch. 8 - On May 1, Athens Inc. began the manufacture of a...Ch. 8 - The standard specifications for an electric motor...Ch. 8 - Cardiff Inc. manufactures men’s sport shirts for...Ch. 8 - Fargo Co. manufactures products in batches of 100...Ch. 8 - Prob. 15PCh. 8 - (Appendix) Overhead variances—four variance
Mobile...Ch. 8 - Shinto Corp. uses a standard cost system and...Ch. 8 - Kamen Manufacturing Co. estimates the following...Ch. 8 - Prob. 19PCh. 8 - Jillian Manufacturing Inc. manufactures a single...Ch. 8 - Cost and production data for Binghamton Beverages...
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