Kansas Company uses a standard cost accounting system. In 2017, the company prod
ID: 2592347 • Letter: K
Question
Kansas Company uses a standard cost accounting system. In 2017, 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 $13.00. Normal capacity was 50,200 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.95 per pound. All materials purchased were used during the year.
Kansas Company uses a standard cost accounting system. In 2017, 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 $13.00. Normal capacity was 50,200 direct labor hours. During the year, 130,000 pounds of raw materials were purchased at $0.95 per pound. All materials purchased were used during the year.
Explanation / Answer
1) standard material price : .97$/pound
price variance 2600 favorable
actual material cost: 123500(130000*.95)
standard material cost :126100
so 126100/130000= .97
2) standard material quantity per unit : 4.5
(.97*130000) - (.97*x)= 3444
standard material consumption 126450(122656/.97)
standard unit of material per unit : 4.5 (126450/28100)
3) standard hours allowed : 44960
28100 units*1.6/unit
4) actual hours worked : 45560
SR*AH-SR*SH=(7800)
SR*AH= 44960*13+7800
SR*AH=592280
AH= 592280/13=45560
5) actual labor rate/hour : 12.9
AH*AR-AH*SR= 4556 FAVORABLE
AH*AR= (AH*SR)-4556
AH*AR=592280-4556=587724
AR= 587724/45560=12.9
6) pre determined overhead rate : 8.04
budgeted cost 361440
budgeted hour 44960
so 361440/44960= 8.04
7) standar cost per unit : 38.029
material: 4.365 (4.5*.97)
labour : 20.8 (13*1.6)
over head: 12.864 (13*8.04)
38.029
8) overhead applied: 328032
budgeted 361440/50200=7.2
actual hour= 45560*7.2= 328032
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