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Week_5__Learning_Exercise_-_Student(1)

# Week_5__Learning_Exercise_-_Student(1) - Create Budgets How...

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Create Budgets How much is expected to be spent on steel in March? Steel for whistles at end of February 100 lbs Whistles to be produced and sold in March 10,000 Steel needed for each whistle 0.1 lbs Budgeted steel inventory end of March 500 lbs Beginning finished goods inventory - Planned ending finished goods inventory - Standard cost for steel \$5.00 lb

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Create Budgets How much is expected to be spent on direct labor in March? Steel for whistles at end of February 100 lbs Whistles to be produced and sold in March 10,000 Steel needed for each whistle 0.1 lbs Budgeted steel inventory end of March 500 lbs Beginning finished goods inventory - Planned ending finished goods inventory - Standard cost for steel \$5.00 lb Standard direct labor hours for each whistle 0.05 Standard direct labor hour \$12.00 Whistles to be produced and sold in March 10,000 0.05 500.00 \$12.00 \$6,000.00
Compute Standard Cost Standard costs: Materials 2 yards per unit \$10 per yard Labor 0.25 DL hour per unit \$11 per hour During October, the company experienced an unanticipated spike in demand and increased production. Although planned production was for 8,000 units, the company actually produced 10,000 units. In anticipation of the original production volume, 18,000 yards were purchased, at a total cost of \$175,000. During the month, 22,000 yards of material were used, and 2400 direct labor hours were worked. Direct labor cost for the month totaled \$27,000. DM Px Variance = Actual Qnty Purchased x (Actual Px - Std Px) Acutal quan pur 18,000 actual price 175,000 18,000 \$9.72 standard price \$10.00 (\$0.28) direct mat price variance (\$5,000) favorable Compute the materials price variance and specify if it is favorable or unfavorable.

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Compute Standard Cost Standard costs: Materials 2 yards per unit \$10 per yard Labor 0.25 DL hour per unit \$11 per hour During October, the company experienced an unanticipated spike in demand and increased production. Although planned production was for 8,000 units, the company actually produced 10,000 units. In anticipation of the original production volume, 18,000 yards were purchased, at a total cost of \$175,000. During the month, 22,000 yards of material were used, and 2,400 direct labor hours were worked. Direct labor cost for the month totaled \$27,000.
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