Flossmoor Corporation uses standard costing and is in the process of updating its direct materials and direct labor standards for Product 2B. The following data have been accumulated:
Direct materials: In the previous period, 20,000 units were produced, and 32,000 square yards of direct materials at a cost of $128,000 were used to produce them.
Direct labor: In the previous period, 20,000 units were produced and 58,000 direct labor hours were worked—34,000 hours on machine H and 24,000 hours on machine K. Machine H operators earned $10 per hour, and machine K operators earned $9 per hour last period. A new labor union contract calls for a 10 percent increase in labor rates for the coming period.
Using this information as the basis for the new standards, compute the direct materials quantity and price standards and the direct labor time and rate standards for each machine for the coming accounting period.

  • CreatedMarch 26, 2014
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