Golden Inc uses standard costing to control its production. It uses in its produ
ID: 2368617 • Letter: G
Question
Golden Inc uses standard costing to control its production. It uses in its production process two diferent materials. During the month of April 20,000 lbs of XO1 were bought at a price of $7/lb plus 8,000 units of XO2 at a total amount of $38,000 dlls. During that same month the material used was 25,000 lbs of XO1 and 35,000 units of XO2. Direct labor for the same month was $380,000 dlls for 20,000 hours. 18,000 hours were used in production. Total overhead for the month was for $200,000 with a variance of $10,000 in favor.
Standar Cost per Finished Product:
Std Amount
Std Cost
Total
XO1
2 lb
$6
$ 12.0
XO2
3 units
$5
$ 15.0
DIRECT LABOR
1.5 hrs
$20
$ 30.0
OVERHEAD *
1.5 hrs
$11
$ 16.5
Total Cost per Unit
$ 73.5
*Overhead rate includes 4 dlls of variable overhead plus $105,000 of fixed overhead. Total overhead rate is based on direct labor hours.
Std Amount
Std Cost
Total
XO1
2 lb
$6
$ 12.0
XO2
3 units
$5
$ 15.0
DIRECT LABOR
1.5 hrs
$20
$ 30.0
OVERHEAD *
1.5 hrs
$11
$ 16.5
Total Cost per Unit
$ 73.5
*Overhead rate includes 4 dlls of variable overhead plus $105,000 of fixed overhead. Total overhead rate is based on direct labor hours.
Explanation / Answer
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Standard Actual Qnty. Rate Amount Qnty. Rate Amount Xo1 28,333.33 6 170,000.00 25000 7 175000 Xo2 42,500.00 5 212,500.00 35000 4.75 166250 Labor 21250 20 425000 18000 21.11 380000 Idle Labor 0 0 0 2000 OH 21250 8.94 190000 200000 Overheads are 105000 + 4*labor hours ie labor hours = 21250 Units produced by 21250 lab hours = 14,166.67 Labor Rate Variance -20000 Labor Efficiency Variance 65000 Labor Idle Time Variance (42,222.22) Material Variance 41,250.00Related Questions
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