Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles.The following
Question:
Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles.The following standards for producing one case of bottles have been established:
Direct materials (4 lbs. @ $0.95) ..............$ 3.80
Direct labor (1.25 hours @ $15.00) ...........18.75
Standard prime cost .............................22.55
During December, 78,000 pounds of material were purchased and used in production. Therewere 15,000 cases produced, with the following actual prime costs:
Direct materials ...........................$ 74,000
Direct labor ...........$315,000 (for 22,500 hrs.)
Required:
1. Compute the materials variances.
2. Compute the labor variances.
3. CONCEPTUAL CONNECTION What are the advantages and disadvantages that can resultfrom the use of a standard costing system?
Step by Step Answer:
Cornerstones of Managerial Accounting
ISBN: 978-1305103962
6th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger