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F. Naz
F. Naz, Chartered Accountant
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1. Vintech company is planning to produce 2,000 units of product

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1. Vintech company is planning to produce 2,000 units of product in 2011. Each unit requires 3 pounds of materials at $6 per pound and a half hour of labor at $14 per hour. The overhead rate is 70% of direct labor.
a. Compute the budgeting amounts for 2011 for direct materials to be used, direct labor, and applied overhead.
b. Compute the standard cost of one unit of product.
c. What are the potential advantages to a corporation of using standard cost.

2. The standard cost of product B manufactured by TLC company includes three units of direct materials at $5.00 per unit. During June, 28,000 units of direct materials are purchased at cost of $4.70 per unit, and 28,000 units of direct materials are used to produce 9,000 units of Product B.
a. Compute the total materials variance and the price and quantity variances.
b. Repeat (a), assuming the purchase price is $5.20 and the quantity purchased and used is 26,200 units.

3. Kendra’ company’s standard labor cost of producing one unit of product DD Is 4 hours at the rate of $12 per hour. During August, 40,800 hours of labor are incurred at a cost of $12.10 per hour to produce 10,000 units of product DD.
a. Compute the total labor variance.
b. Compute the labor price and quantity variance.
c. Repeat (b), assuming the standard is 4.2 hours of direct labor at $12.25 per hour.

4. Winters Company uses a standard cost accounting system. During January the company reported the following manufacturing variances.
Materials price variance $1,250 U Labor quantity variance $775 U
Materials quantity variance 700 F Overhead variance 800 U
Labor price variance 525 U
In addition, 8,000 units of product were sold at $8.00 per unit. Each unit sold had a standard cost of $6.00. selling and administrative expenses were $6,000 for the month.
Submitted: 6 years ago.
Category: Homework
Expert:  F. Naz replied 6 years ago.

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