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AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of
AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per month. The standard costs per batch are as follows: |
Standard Costs per Batch | ||||||||
Direct materials: | ||||||||
Various chemicals (500 pounds per batch at $0.60/pound) | $ | 300 | ||||||
Direct labor: | ||||||||
Preparation and blending (25 hours per batch at $7.00/hour) | 175 | |||||||
Manufacturing overhead: | ||||||||
Fixed ($50,000 per month |
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