Valport Valve Company manufactured 7,000 units during March of a control valve u

Question

Valport Valve Company manufactured 7,000 units during March of a control valve used by milk processors in its Shreveport plant. Records indicated the following: Direct labor Direct material purchased Direct material used 36,100 hr. at $14.70 28,000 lb. at $2.20 26,000 lb. The control valve has the following standard prime costs. Direct material: 4 lb. at $2.10 per lb. Direct labor: 5 hr. at $15.10 per hr. 8.40 75.50 Standard prime cost per unit $83.90 Required 1. Prepare a schedule of standard production costs for March, based on actual production of 7,000 units. VALPORT VALVE COMPANY: SHREVEPORT PLANT Schedule of Standard Production Costs: Based on 7,000 Units For the Month of March Direct material Direct labor Total standard production costs

Explanation / Answer

1) VALPORT VALVE COMPANY :SHREVEPORT PLANT Schedule of Standard Prodcuction costs: Based on 7,000 units For the month of March Direct Materials $           58,800 Direct Labor $       5,28,500 Total Standard Prouction cost $       5,87,300 Working: Total Output Units Produced Standard cost per unit Total Standard cost Direct Materials 7000                8.40           58,800 Direct Labor 7000              75.50       5,28,500 2) a. Direct Material Price Variance $           2,600 Unfavorable b. Direct Material Quantity Variance $           4,200 Favorable c. Direct Material Purchase Price Variance $           2,800 Unfavorable d. Direct Labor Rate Variance $         14,440 Favorable e. Direct Labor Efficiency Variance $         16,610 Unfavorable Working; a. Direct Material Price Variance = (Standard Price - Actual Price)*Actual Quantity used = (2.10-2.20)*26000 = $           2,600 Unfavorable Standard Price           2.10 Actual Price           2.20 Actual Quantity 26000 b. Direct Material Quantity Variance = (Standard Quatity-Actual Quantity)*Standard Price = (28000-26000)*2.10 = $           4,200 Favorable Standard Quantity = Actual Output x Standard Quantity per unit of output = 7000 x 4 = 28000 Actual Quantity = 26000 c. Direct Material Purchase Price Variance = (Standard Price - Actual Price)*Actual Quantity purched = (2.10-2.20)*28000 = $         2,800 Unfavorable Standard Price           2.10 Actual Price           2.20 Actual Quantity 28000 d. Direct Labor Rate Variance = (Stadard rate-Actual rate)*Actual labor hours = (15.10-14.70)*36100 = $       14,440 Favorable Working: Standard Rate               15.10 Actual Rate               14.70 Actual labor hours 36100 e. Direct Labor Efficiency Variance = (Standard hours-Actual hours)*Standard rate = (35000-36100)*15.10 = $         16,610 Unfavorable Standard hours = 7000 x 5 = 35000

Related Questions

Navigate

• Browse (All)
• Browse V
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.