Kansas Company uses a standard cost accounting system. In 2014, the company prod
ID: 2470270 • Letter: K
Question
Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,100 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 49,550 direct labor hours. During the year, 130,200 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.
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Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,100 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 49,550 direct labor hours. During the year, 130,200 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.
Explanation / Answer
Ans 1 Material Price Variance AQ*AP-SP*AQ 5208 F 130200*.91-SP*130200 130200*(.91-SP) -5208 F .91-SP -0.04 SP 0.95 Standard Material Price $0.95 Material Quantity Variance Standard Price*(Actual Qunatity-Standard Quantity) .95*(130200-SQ) 893 123690-.95SQ 893 -.95SQ -122797 -SQ -129260 Standard Quantity 129260 Ans 3 Standard Hours allowed 28100 units*1.6 44960 Ans 4 Actual Hours allowed Labour Qunatity variance SP*(AH-SH allowed) 5760 U 12*(AH-44960) 5760 12AH-539520 5760 12AH 545280 Actual Hours Allowed 45440 545280 Ans 5 Labour Price variance Actual Price*AQ-AQ*Standard Price -17722 F 45440*(AP-12) -17722 45440AH-545280 -17722 45440AH 527558 AH 11.61 Ans 6 predetermined overhead rate 341895/49550 6.9 Ans 7 Direct Material 4.6*.95 4.37 Direct labour 1.6*12 19.2 Varaible Overhead 1.6*6.9 11.04 Total Standard Cost 34.61 Ans 8 Actual Overhead not given Actual Overhed ? Applied would be 28100*6.9 193890 Overapplied/underapplied Work in process Direct Material 118482 Direct labour AH*AR 527558 Varaible Overhead 193890 Tota in WIP 839930
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