? Plush pet toys are produced in a largely automated factory in standard lots of 100 toys
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Plush pet toys are produced in a largely automated factory in standard lots of 100 toys each. A standard cost system is used to control costs and to assign cost to inventory: Price Quantity Standard Standard Plush fabric $ 2 per metre 15 metres per lot Direct labour $ 10 per hour 2 hours per lot Variable overhead, estimated at $3 per lot, consists of miscellaneous items such as thread, a variety of plastic squeakers, and paints that are applied to create features such as eyes and whiskers. Fixed overhead, estimated at $29,000 per month, consists largely of depreciation on the automated machinery and rent for the building. Variable overhead is allocated based on lots produced. The standard fixed overhead allocation rate is based on the estimated output of 1,000 lots per month. Actual data for last month follow: Production 2,000 lots Sales 1,300 lots Plush fabric purchased Cost of fabric purchased 39,000 metres $79,600 Fabric used 28,800 metres Direct labour 3,700 hours Direct labour cost $34,200 Variable overhead $6,000 Fixed overhead $29,850 The company's policy is to record materials price variances at the time materials are purchased. Plush pet toys are produced in a largely automated factory in standard lots of 100 toys each. A standard cost system is used to control costs and to assign cost to inventory: Price Quantity Standard Standard Plush fabric $ 2 per metre 15 metres per lot Direct labour $ 10 per hour 2 hours per lot Variable overhead, estimated at $3 per lot, consists of miscellaneous items such as thread, a variety of plastic squeakers, and paints that are applied to create features such as eyes and whiskers. Fixed overhead, estimated at $29,000 per month, consists largely of depreciation on the automated machinery and rent for the building. Variable overhead is allocated based on lots produced. The standard fixed overhead allocation rate is based on the estimated output of 1,000 lots per month. Actual data for last month follow: Production 2,000 lots Sales 1,300 lots Plush fabric purchased Cost of fabric purchased 39,000 metres $79,600 Fabric used 28,800 metres Direct labour 3,700 hours Direct labour cost $34,200 Variable overhead $6,000 Fixed overhead $29,850 The company's policy is to record materials price variances at the time materials are purchased.
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Related Book For
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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