ACCT 310 – Quiz 5 Fall 2008 Ajax, Inc. manufactures parts used by printing companies and uses a standard cost system. The following data are shown on the standard cost card for one of the company’s products, the fold roller: Direct material 2.5 lbs @ $3.00 per lb. $ 7.50 Direct labor 0.5 hrs. @ $12.00 per hr. 6.00 Variable overhead 0.25 hrs. @ $8 per hr. 2.00 Fixed overhead 0.25 hrs. @ $14 per hr. 3.50 Total standard cost $ 19.00 Overhead costs, both variable and fixed, are applied to production on the basis of machine hours. The fixed overhead rate of $14 per machine hour is based on budgeted monthly activity of 1,600 machine hours. Additional data on the operations for October 2008 are as follows: . ! Direct materials purchased, 18,000 lbs. at a cost of $2.80 per lb. Direct materials used, 16,500 lbs. ! Direct labor recorded, 3,400 hours at $13 per hour. ! Variable overhead costs incurred, $12,800. Fixed overhead costs incurred, $20,300. ! A total of 1,450 machine hours was recorded.
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