Question
Rendolin Inc. has developed the following budget data based on 100,000 direct labor hours (50,000 units @ 2 direct labor hours each). Budgeted cost at
Rendolin Inc. has developed the following budget data based on 100,000 direct labor hours (50,000 units @ 2 direct labor hours each).
Budgeted cost at 50,000 units | |
Direct materials | $720,000 |
Direct labor | $1,200,000 |
Total | $1,920,000 |
During the last period, the company actually produced 48,000 units.
Actual costs were:
Actual cost at 48,000 units | |
Direct materials (230,400 grams purchased and used) | $737,280 |
Direct labor (100,000 hours) | $1,150,000 |
Total | $1,887,280 |
1. Complete the following cost sheet for Rendolin Inc. based on the budgeted data, above. (You would not use actual data until you started computing variances.)
Type letters A-D each on a line in the answer box with your final answer next to the letter.
You can show work below where you answer these and #2.
Standard Quantity | Standard Price | Standard Cost per Unit | |
Direct materials | B. ??? grams | $3.00 per gram | A. $ ??? |
Direct labor | 2 hours | C. $ ??? per hour | $ 24 |
Total | D. $??? |
2. How much SHOULD it cost (for materials and labor combined) to produce 48,000 units? Hint: "D" above is what it SHOULD cost for 1 unit. See if your answer for D makes sense given the budgeted cost for 50,000 unit
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