|The Roberts Company produces product X, which is in high demand. Mr. Roberts, the owner, believes that
Question:
|The Roberts Company produces product X, which is in high demand. Mr. Roberts, the owner, believes that three or four times as many units could be sold as his five employees are capable of making. Direct materials and direct labor quantity standards and price standards are as follows:
Direct materials quantity standard... 1.3 pounds per unit Direct labor quantity standard ........ccsseecsseessseessseees 6 hours per unit Direct materials price standard ......cccssescssessseessseees $10 per pound Direct labor price standard ........ccscsssssssscsseessseesseeees $12 per hour Factory overhead is budgeted and applied on the basis of standard direct labor hours. Practical capacity is 9,000 standard direct labor hours. The factory overhead budget at practical capacity shows $45,000 of variable overhead and $18,000 of fixed overhead.
Required: (1) Compute the standard variable and fixed overhead rates per direct labor hour based on the budget at practical capacity.
(2) Compute the standard direct materials, direct labor, variable overhead, and fixed overhead costs per unit of product X.
TKY-1
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Accounting Information For Business Decisions
ISBN: 9780030224294
1st Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley