STANDARD Developing Standard Costs Standard Cost Sheet Supreme Shine Quantities
ID: 2360997 • Letter: S
Question
STANDARD Developing Standard Costs Standard Cost Sheet Supreme Shine Quantities per Batch: Gallons Jase 30.00 Add Kase 3.00 Total to be boiled Total after boiling 90.00% Add Lase 0.75 Total output Direct Materials: Cost Per Input Gallon Cost per Cost per Cost Of Input Batch Case Jase $20.00 per drum Kase 1.81 per gallon Lase 2.44 per gallon Bottles 0.17 per bottle Cardboard 0.48 per case Direct Labor: Cost Per Hourly Gallon Cost per Cost per Rate Of Output Batch Case Production labor $11.00 Packaging labor 8.16 Factory Overhead Cost Per Factory Overhead Gallon Cost per Cost per Rate Of Output Batch Case Variable 120% Fixed 140% TOTAL STANDARD COST PER CASE $37.02Explanation / Answer
The decision about the quantity and cost of productive components is more complex than it may seem. Although performance reports may be prepared by managerial accountants, the standards themselves should originate with personnel who best understand the productive process. These personnel should develop standards that are based on realistic information derived from careful study of business processes. Mathematically, yes you can set standard of unit cost using the average cost and the standard or quantity consumed using the average consumption.
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