Problem 25-4A Kansas Company uses a standard cost accounting system. In 2017, th
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Question
Problem 25-4A
Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,600 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,700 direct labor hours. During the year, 130,800 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.
Problem 25-4A
Kansas Company uses a standard cost accounting system. In 2017, the company produced 27,600 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $13.00. Normal capacity was 49,700 direct labor hours. During the year, 130,800 pounds of raw materials were purchased at $0.91 per pound. All materials purchased were used during the year.
Explanation / Answer
If the materials price variance was $5,232 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, e.g. 2.75.)
=Actual Cost of material purchased + favourable Variance =Standared price of 130800 pound of Material
=130,800 *.91 + 5232 =124260
Standard materials price per pound =124260/130800 =.95 Per Pound
If the materials quantity variance was $14,136 unfavorable, what was the standard materials quantity per unit?
Actual Quantity Used =130,800
Efficency Variance =Actual Qty *Standared Rate - Standared qty *SR
14136=130800*.95 - Standared qty *.95
Standared Qty =110124/.95 =115920 pound
standard materials quantity per unit =115920/27,600 =4.20 pound per unit
What were the standard hours allowed for the units produced?
standard hours allowed for the units produced =1.6*27600 =44160
If the labor quantity variance was $5,200 unfavorable, what were the actual direct labor hours worked?
Actual direct labor hours worked =((44160*13)+5200))/13 =44560
If the labor price variance was $8,912 favorable, what was the actual rate per hour? (Round answer to 2 decimal places, e.g. 2.75.)
=(44560*13-8912)/44560=12.80 per hour
If total budgeted manufacturing overhead was $323,050 at normal capacity, what was the predetermined overhead rate?
Normal capacity was 49,700 direct labor hours =323050/49700 =6.5 per direct labor hours
What was the standard cost per unit of product? (Round answer to 2 decimal places, e.g. 2.75.)
How much overhead was applied to production during the year?
44560 hours *6.5 per hour
Using one or more answers above, what were the total costs assigned to work in process?
=27,600 units *Standard cost per unit 27.40 =755964
If total budgeted manufacturing overhead was $323,050 at normal capacity, what was the predetermined overhead rate?
Normal capacity was 49,700 direct labor hours =323050/49700 =6.5 per direct labor hours
What was the standard cost per unit of product? (Round answer to 2 decimal places, e.g. 2.75.)
How much overhead was applied to production during the year?
44560 hours *6.5 per hour
Using one or more answers above, what were the total costs assigned to work in process?
=27,600 units *Standard cost per unit 27.40 =755964
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