Groovy Bottles is a manufacturer of ceramic bottles. The company has the following standards:
Direct materials (clay)....................... 1.3 kg per bottle, at a cost of $0.40 per kg
Direct labour...................................... 1/5 hour per bottle, at a cost of $14.80 per hour
Static budget variable overhead............................ $70,500
Static budget fixed overhead ................................. $30,500
Static budget direct labour hours................................. 10,000 hours
Static budget number of bottles.................................... 52,000
Groovy Bottles allocates manufacturing overhead to production based on standard direct labour hours. Last month the company reported the following actual results for the production of 69,000 bottles:
Direct materials........................................ 1.5 kg per bottle, at a cost of $0.70 per kg
Direct labour............................................. 1/4 hour per bottle, at a cost of $12.90 per hour
Actual variable overhead.......................... $104,600
Actual fixed overhead .............................. $ 28,700
Requirements
1. Compute the standard predetermined variable manufacturing overhead rate, the standard predetermined fixed manufacturing overhead rate, and the total standard predetermined overhead rate.
2. Compute the standard cost of each of the following inputs: direct materials, direct labour, variable manufacturing overhead, and fixed manufacturing overhead.
3. Determine the standard cost of one ceramic bottle.