Standard Direct Materials Cost per Unit
Bavarian Chocolate Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (1,880 bars) are as follows:
| Ingredient |
Quantity |
Price |
| Cocoa |
600 |
lbs. |
$0.30 |
per lb. |
| Sugar |
180 |
lbs. |
$0.80 |
per lb. |
| Milk |
150 |
gal. |
$1.60 |
per gal. |
Determine the standard direct materials cost per bar of chocolate. If required, round to the nearest cent.
$ _________________ per bar
2.
| eBookeBookeBook
Standard Product Cost
Hickory Furniture Company manufactures unfinished oak furniture. Hickory uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:
| Direct labor: |
standard rate |
$26.00 per hr. |
|
standard time per unit |
4.5 hrs. |
| Direct materials (oak): |
standard price |
$9.00 per bd. ft. |
|
standard quantity |
20 bd. ft. |
| Variable factory overhead: |
standard rate |
$2.40 per direct labor hr. |
| Fixed factory overhead: |
standard rate |
$1.60 per direct labor hr. |
a. Determine the standard cost per dining room table. If required, round your answer to two decimal places.
$ _________________ per table
b. A standard cost system provides Hickory Furniture management a cost control tool using the principle of _________________ . Using this principle, _________________ cost deviations from standards can be investigated and corrected.
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3.eBookeBookeBook
Budget Performance Report
Warwick Bottle Company (WBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:
| Cost Category |
Standard Cost
per 100 Two-Liter
Bottles |
| Direct labor |
|
$1.14 |
|
|
|
| Direct materials |
|
6.12 |
|
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| Factory overhead |
|
0.42 |
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Total |
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$7.68 |
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At the beginning of March, WBC management planned to produce 530,000 bottles. The actual number of bottles produced for March was 570,000 bottles. The actual costs for March of the current year were as follows:
| Cost Category |
Actual Cost for the
Month Ended March 31, 2014 |
| Direct labor |
|
|
|
|
$6,370 |
|
|
|
|
| Direct materials |
|
|
|
|
34,050 |
|
|
|
|
| Factory overhead |
|
|
|
|
2,420 |
|
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Total |
|
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|
$42,840 |
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Enter all amounts as positive numbers.
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a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.
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Manufacturing Cost Budget
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For the Month Ended March 31, 2014
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Standard Cost at Planned Volume (530,000 Bottles)
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b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
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Manufacturing Costs-Budget Performance Report
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For the Month Ended March 31, 2014
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Standard Cost at Actual Volume (570,000 Bottles)
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Cost Variance-(Favorable) Unfavorable
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c. The Company's actual costs were $936 _________________ than budgeted. _________________ direct labor and direct material cost variances more than offset a small _________________ factory overhead cost variance.