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Unformatted text preview: Chapter 9 – Standard Costs In-Class Exercises Part 1 – Setting Standards JHF Corporation is in the process of developing standards for one of its products (Product A). Product A requires a raw material that is purchased for $14.00 per pound from the supplier. By paying cash, the company gets a discount of 3% off this purchase price. Shipping costs from the supplier's warehouse is $2.10 per pound. Receiving costs are $0.32 per pound. Each unit of product A requires 1.30 pounds of this material. The allowance for waste and spoilage is 0.09 pound and the allowance for rejects is 0.11 pound of this material for each unit of product A. The basic direct labor wage rate is $10.00 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $1.10 per hour. Product A requires 0.62 direct labor- hours per unit. The allowance for breaks and personal needs is 0.03 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.10 direct labor-hours per unit....
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- Spring '10
- Direct material price variance, raw material, overhead volume variance, JHF Corporation