5. Practice Exercise 02 PuzzleJigs manufactures custom jigsaw puzzles by turning

ID: 2553358 • Letter: 5

Question

5. Practice Exercise 02 PuzzleJigs manufactures custom jigsaw puzzles by turning a customer's 8 x 10 photograph into a 300-plece puzzle. The following information has been provided by various units within the company. Each photograph is mounted onto a 9 x 12 piece of cardboard using 1 ounce of adhesive. The company buys the cardboard in bundles of 500 pieces for $100. PuzzleJigs pays shipping costs of $15 per bundle on the cardboard. The mounting adhesive costs $0.25 per ounce. Each finished puzzle is packaged in a box that costs PuzzleJigs $0.5 to purchase. It takes 24 minutes for a worker to mount the picture, cut the puzzle, and pack it in a box. Workers are paid $6.6 per hour; fringe benefits amount to an additional 25 percent of wages. PuzzleJigs applies overhead at a rate of $10 per direct labor hour. Calculate the standard price and quantity for each component of direct materials. (Round answers to 2 decimal places, e.g. 15.20.) Material 9x 12 cardboard Mounting adhesive Standard Quantity per sheet per ounce r box sheet ounce Packing box box Calculate the standard price and quantity for direct labor. (Round answers to2 Standard Quantity Standard Price Direct labor hour Calculate the standard price and quantity for manufacturing overhead. (Round answers to 2 decimal places, e.g. 15.25.) Standard Price Standard Quantity

Explanation / Answer

Answer:

Material

Standard Quantity

Standard Price

9× 18 cardboard

sheet

(100+15)/500 = $0.23

per sheet

Mounting adhesive

ounce

$0.25

per ounce

Packing box

box

$0.50

per box

_____________________________________________

Standard quantity or hours

= 24/60

= 0.4 hour per unit
Standard Price

= 6.6 x 1.25

= $8.25 per hour

Standard
Quantity

Standard
cost

Direct labor

0.4 hour

and

8.25

________________________________________

Standard quantity or hours

= 24/60 = 0.4 hour per unit
Standard Price

= $10 per hour

Standard
Quantity

Standard
cost

Overhead cost

0.4 hour

and

___________________________________

Standard cost of producing one puzzle:

Material = (1*0.23 + 3*0.25 + 1*1)

1.48

Labor = 0.4 x 8.25

3.3

Overheads = 0.4 x 10

Total stadered Cost

8.78