# Standard Costing

Good Essays
357 Words
Grammar
Plagiarism
Writing
Score
Standard Costing
Budgeted Production Cost and Variance Analysis.
At the beginning of 2011, Jejemon Corporation adopted the following standards: Direct Materials (3 lbs. @ P2.50 / lb) P 7.50 Direct Labor (5 hours @ P7.50 / hr) 37.50 Factory Overhead: Variable (P3.00 per direct labor hour) 15.00 Fixed (P4.00 per direct labor hour) 20.00 Standard Cost per unit P 80.00

Normal volume per month is 40,000 standard labor hours. Jejemon’s january budget was based on normal volume. During January Jejemon’s produced 7,800 units, with records indicating the following: Direct Materials purchased 25,000 lbs @ P2.60 Direct Materials used 23,100 lbs Direct labor 40,100 hours @ P7.30 Factory Overhead P300,000
Required:
1) Schedule of budgeted production costs based on actual production. 2) Variance Analysis (materials, labor, and overhead)
Determination of Standard and Actual Data
The production data of Long Company for the month of June show the following:

Total Manufacturing Cost Variance P 3,840 UF
Price Usage Variance 1,600 UF
Material Cost Variance 440 UF
Labor Cost Variance 4,200 F
Labor Rate Variance 8,400 F

Other Data: • The company paid P0.10 more than the standard price. • Two (2) pieces of materials are required per unit of product. • An overabsorbed capacity of 200 units of product were noted when actual production ws compared with the normal volume of 8,000 untis. • Payroll showed total labor cost of P168,000. • Workers are usually paid at an average of P4.20, though the records showed that the company paid less than this amount during the month. • Standard overhead rate amounts to P5 per direct labor hour, 40% of which is fixed.

Required: Determine the following: 1) Actual units produced in June. 2) Actual quantity of materials used for production. 3) Standard and actual price of materials per piece. 4) Total standard direct labor hours that should have been used

## You May Also Find These Documents Helpful

• Good Essays

rate of 1-1/2 times their straight-time rate for anything over 40 hours per week. The straight-time pay…

• 3588 Words
• 15 Pages
Good Essays
• Satisfactory Essays

• Each employee could have a standard hourly rate between \$10.00 and \$30.00 per hour.…

• 694 Words
• 3 Pages
Satisfactory Essays
• Satisfactory Essays

It is estimated that 10,000 direct labor hours will be worked during the year. The predetermined overhead rate will be:…

• 742 Words
• 3 Pages
Satisfactory Essays
• Satisfactory Essays

1. Buildz manufacturing currently products 1k tables per month. Following per unit data for 1k tables apply for sales to regular customers…

• 367 Words
• 3 Pages
Satisfactory Essays
• Good Essays

|According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of |…

• 2790 Words
• 12 Pages
Good Essays
• Good Essays

Production was anticipated to increase to 1.9M units from the projected 1.1M given two-shift, five-day workweek. This still represented considerable excess capacity.…

• 847 Words
• 3 Pages
Good Essays
• Satisfactory Essays

From the article, I know that intracompany work was billed at \$400 per hour, and commercial sales were billed at \$800 per hour.…

• 332 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

BREAK EVEN POINT ANALYSIS Production Units 200 Revenue Variable cost Fixed cost \$41,240 \$40,411 729 Price per unit: (Revenue/Unit) Variable cost per unit (Variable cost/unit) Contribution Margin (Price per unit-­‐variable cost per unit) \$206.20 Break Even Point= (Fixed cost/Contribution margin) or 729/4.145 \$202.06 \$4.15 175.875 units TOTAL COST VARIANCE ANALYSIS Total costs Budget Production Unit Expected cost per unit \$41,140,000 200,000 \$205.70 Actual total cost Actual production unit Actual cost per unit \$38,148,000 180,000 211.91 FLASH MEMORY…

• 421 Words
• 15 Pages
Satisfactory Essays
• Good Essays

The closing of the plants in Guarulhos caused the Jaboatão plant to increase the production of one-eighth of its production to absorb this shortcoming. Luiz Pinto can basically choose from several solutions to reach a required capacity of 540 units/min:…

• 1193 Words
• 5 Pages
Good Essays
• Satisfactory Essays

STANDARD COSTING VARIANCES Materials Actual Production X X X Vs. Standard Usage Standard Price Actual Usage Actual Production X X X Vs. Standard Usage Standard Price Actual Usage Actual Price…

• 344 Words
• 2 Pages
Satisfactory Essays
• Better Essays

Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?…

• 2321 Words
• 10 Pages
Better Essays
• Satisfactory Essays

(Note: Of the \$ 70 of overhead, \$14 is variable and \$56 relates to fixed costs. The \$56 of fixed overhead is allocated as \$ 1.25 per direct labor dollar)…

• 1084 Words
• 5 Pages
Satisfactory Essays
• Good Essays

• Each employee could have a standard hourly rate between \$10.00 and \$30.00 per hour.…

• 2158 Words
• 9 Pages
Good Essays
• Satisfactory Essays

IS STANDARD COSTING OBSOLETE? Department of Accountancy University of Kelaniya What is Standard costing? Standard costing is technique which establishes predetermined estimates of the costs of products and services and then compares these predetermined costs with actual costs as they are incurred. Management Accounting 2…

• 986 Words
• 10 Pages
Satisfactory Essays
• Good Essays

Standard costing has been used for over a 100 years. Early last century financial accountants were interested in finding a better way of valuing stocks and work-in progress, important elements the calculation of profit and the concept of standard costing was born. Some historians say the origins of standard costing go back even further and have found evidence it was used in the American Civil War by quarter masters as a means of controlling costs. It doesn’t really matter when the technique was invented what is more relevant is that it is still in use today.…

• 10455 Words
• 42 Pages
Good Essays