DMA Inc. processes corn into corn starch and corn syrup. The companys productivity and cost standards follow:
Question:
DMA Inc. processes corn into corn starch and corn syrup. The company’s productivity and cost standards follow:
From every bushel of corn processed, 12 pounds of starch and three pounds of syrup should be produced.
Standard direct labor and variable overhead total $0.42 per bushel of corn processed.
Standard fixed overhead (the predetermined fixed overhead application rate) is $0.35 per bushel processed.
Required:
a. Calculate the standard absorption cost per pound for the starch and syrup produced from the processing of 15,000 bushels of corn if the average cost per bushel is $2.83.
b. Comment about the usefulness of this standard cost for management planning and control purposes.
Step by Step Answer:
a Raw material cost 283 per bushel Direct labor and variable overhead 042 per ...View the full answer
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
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