You have introduced a standard cost accounting system for FOL. The following standard costs have been developed
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Question:
You have introduced a standard cost accounting system for FOL. The following standard costs have been developed for the Cattle drench.
| Direct materials (1 kilogram) | $ 20 | ||
| Direct Labour (.25 hours) | $ 15 | ||
| Overhead (DLH basis) | $ 3 | ||
| $ 38 | |||
Production and cost information for May was:
| Actual direct material purchased | 1200 | kilograms | ||
| Actual direct materials issued | 900 | kilograms | ||
| Actual output | 800 | kilograms | ||
| Actual cost of materials purchased | $ 25,500 | |||
| Actual direct labur rate | $ 60 | per hour | ||
| Actual direct labour hours | 280 | |||
| Actual overhad costs | $ 4,500 | |||
Required
- Calculate the following standard cost variances for May and provide general journal entries to record the cost flows for May.
(a) materials price
(b) materials usage
(c) direct labour rate
(d) direct labour efficiency
(e) total overhead
Expert Answer:
Related Book For 
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
Posted Date:
