Juicy Ltd. is a fruit juice manufacturer that uses a standard costing system and flexible budget for factory overhead. Normal volume is 60,000 units per year. Standard cost details for producing one unit (one 2 Litre bottle) of "Sweetie Syrup" is given below: Direct Material (1.35 litres per unit @ $12.60 per litre) $ 17.01 Direct Labour (0.75 hrs per unit @ $22 per hour) $16.50 Factory Overhead $15.00 Total Standard Cost per Unit $48.51 Factory overhead is applied on the basis of standard direct labour hours. The factory overhead budget for April was $77,000 for a budgeted production level of 5,250 units. For the month of April, the following actual results are observed: 7,200 litres of direct material were purchased at a cost of $95,200 The company had beginning direct materials of 450 litres and ending materials of 800 litres for the period. Direct labour usage was 4,100 Direct Labour Hours (DLH) at a cost of $20.00 per DLH. Factory overhead incurred was $79,200 of which $38,500 was considered to be fixed. 5,500 units were sold in the period.

Juicy Ltd. is a fruit juice manufacturer that uses a standard costing system and flexible budget for factory overhead. Normal volume is 60,000 units per year. Standard cost details for producing one unit (one 2 Litre bottle) of "Sweetie Syrup" is given below: Direct Material (1.35 litres per unit @ $12.60 per litre) $ 17.01 Direct Labour (0.75 hrs per unit @ $22 per hour) $16.50 Factory Overhead $15.00 Total Standard Cost per Unit $48.51 Factory overhead is applied on the basis of standard direct labour hours. The factory overhead budget for April was $77,000 for a budgeted production level of 5,250 units. For the month of April, the following actual results are observed: 7,200 litres of direct material were purchased at a cost of $95,200 The company had beginning direct materials of 450 litres and ending materials of 800 litres for the period. Direct labour usage was 4,100 Direct Labour Hours (DLH) at a cost of $20.00 per DLH. Factory overhead incurred was $79,200 of which $38,500 was considered to be fixed. 5,500 units were sold in the period.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 20P: Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The...

See similar textbooks

Similar questions

Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen is $35 per unit and $55 is used in direct labor, while the direct material for the king is $55 per unit, and the labor cost is $70 per unit. Box Springs estimates it will make 4,300 queens and 3,000 kings in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how many of each product should be made?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Carltons Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $60. It also expects to manufacture 30.000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: The cost driver for each cost pool and its expected activity is shown: A. What is the per-unit cost for each product under the traditional allocation method? B. What is the per-unit cost for each product under ABC costing?
Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of 300 and 600, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 300 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. 2. Identify the optimal amount that should be produced of each machine part and the total contribution margin associated with this mix. 3. What if market conditions are such that Patz can sell at most 75 units of Part A and 60 units of Part B? Express the objective function with its associated constraints for this case and identify the optimal mix and its associated total contribution margin.
Jillian Manufacturing Inc. manufactures a single product and uses a standard cost system. The factory overhead is applied on the basis of direct labor hours. A condensed version of the company’s flexible budget follows: The product requires 3 lb of materials at a standard cost of $5 per pound and 2 hours of direct labor at a standard cost of $10 per hour. For the current year, the company planned to operate at the level of 6,250 direct labor hours and to produce 3,125 units of product. Actual production and costs for the year follow: Required: For the current year, compute the factory overhead rate that will be used for production. Show the variable and fixed components that make up the total predetermined rate to be used. Prepare a standard cost card for the product. Show the individual elements of the overhead rate as well as the total rate. Compute (a) standard hours allowed for production and (b) under- or overapplied factory overhead for the year. Determine the reason for any under- or overapplied factory overhead for the year by computing all variances, using each of the following methods: Two-variance method Three-variance method (appendix) Four-variance method (appendix)
Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. At this level of production, the company incurs the following costs: Unit-level material cost per suit Unit-level labor cost per suit Unit-level overhead per suit Batch-level set-up costs for each batch of 500 suits Annual product-level costs Allocated facility-level costs $80 $40 $20 $1,200 $15,000 $50,000 Easton Clothiers has offered to purchase 500 suits as a one-time special purchase at a price of $135. Required: Prepare a quantitative analysis that indicates whether the special order should be accepted. Note: Negative amount should be indicated with a minus sign. Evaluation of special order: Less special order costs:
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,400 units and 15,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. Type A Type B Type C Total $ $ 4,800 units 7,200 units 5 6 8 8 $ 7 5 $ 20 19 The cost formula that expresses the behavior of Shum's total cost is:
Winter Grow Inc. manufactures a range of heat mats. The production information for its standard heat mat is follows: Production Information for Standard Heat Mat Production Info Amount Monthly production capacity 20,000 units Current level of production 15,000 units Normal selling price per unit $25 per unit Variable manufacturing costs $5 per unit Variable selling and administrative expenses $3 per unit Fixed manufacturing costs (allocated) $4 per unit Fixed selling and administrative expenses (allocated) $2 per unit During current month, the company received an offer to sell 4,000 lights to an exporter for $15 per unit. The variable selling and administrative expenses per unit will be reduced by $1 as this is a one-off offer and some of the selling expenses would not be payable on this offer. Acceptance of this order does not affect the pricing policy in the domestic market. How much would be the profit or loss from the acceptance of this offer? Group of…