Nosemer Company produces engine parts for large motors. The company uses a standard cost system for production costing and control. The standard cost sheet for one of its higher volume products (a valve), is as follows:

During the year, Nosemer experienced the following activity relative to the production of valves:

a. Production of valves totaled 25,000 units.

b. A total of 130,000 pounds of direct materials was purchased at $3.70 per pound.

c. There were 10,000 pounds of direct materials in beginning inventory (carried at $4 per pound). There was no ending inventory.
The company used 36,500 direct labor hours at a total cost of $392,375.
Actual fixed overhead totaled $95,000.

f. Actual variable overhead totaled $210,000.
Nosemer produces all of its valves in a single plant. Normal activity is 22,500 units per year. Standard overhead rates are computed based on normal activity measured in standard direct labor hours.

Required: LO1

Transcribed Image Text:

Direct materials (5 lbs. @ $4.00) Direct labor (1.4 hrs. @ $10.50) Variable overhead (1.4 hrs. $6.00) Fixed overhead (1.4 hrs. @ $3.00) Standard unit cost $20.00 14.70 8.40 4.20 $47.30