Question
New Jersey Valve Company manufactured 7,800 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following:
New Jersey Valve Company manufactured 7,800 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following:
Direct labor | 40,100 | hr. at $14.60 per hr. |
Direct material purchased | 34,000 | lb. at $2.30 per lb. |
Direct material used | 29,100 | lb. |
The control valve has the following standard prime costs:
Direct material | 4 | lb. at $2.20 per lb. | $ | 8.80 | |
Direct labor | 5 | hr. at $15.00 per hr. | 75.00 | ||
Standard prime cost per unit | $ | 83.80 | |||
Required: 1.Prepare a schedule of standard production costs for January, based on actual production of 7,800 units. 2.For the month of January, compute the following variances. Prepare a schedule of standard production costs for January, based on actual production of7,800 units.
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For the month of January, compute the following variances.(Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
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