Flower City cartridges (FCC) manufactures replacement cartridges for desktop pri
ID: 2345469 • Letter: F
Question
Flower City cartridges (FCC) manufactures replacement cartridges for desktop printers. FCC uses standard costs within a job order cost system. In June, FCC purchased 18 gallons of blue ink for $38.20 and produced the following four different cartridge jobs using blue ink ( and other ink materials, and direct labor):Jobs Blue Ink /Gallons/Used
CJ120 4.2
HP9X2 3.9
CN417 3.8
XRX776 4.4
All 4 jobs have blue ink material standard that calls for 4 gallons of blue ink per job. Blue ink has a standard cost of $20 per gallon. These were the only jobs calling for blue ink in June. There was no beginning blue in inventory on June 1.
Required:
Prepare a table that indicates the financial disposition of the historical cost of the blue ink purchased in June (That is, account for the $385.20 Blue ink purchased).
Explanation / Answer
Assuming All the 4 inks have same cost, cost per gallon = $385.20/18= $19.26 So, The table should be as follows CJ120 = 4.2 * $19.26 = $80.89 HP9X2 = 3.9 * $19.26 = $75.11 CN417 = 3.8* $19.26 = $73.19 XRX776 = 4.4* $19.26 = $84.74 Remaining, Blue Ink = 1.7 * $19.26 = $32.74
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