Oklahoma Manufacturing Company uses a standard cost system. In 2012, 28,400 unit

Question

Oklahoma Manufacturing Company uses a standard cost system. In 2012, 28,400 units were produced. Each unit took several pounds of direct materials and 1 1/2 standard hours of direct labor at a standard hourly rate of $12.00. Normal capacity was 50,000 direct labor hours. During the year, 131,000 pounds of raw materials were purchased at $0.94 per pound. All materials purchased were used during the year. If the materials price variance was $3,930 favorable, what was the standard materials price per pound? (Round answer to 2 decimal places, i.e. 0.50.)$ per pound If the materials quantity variance was $5,100 unfavorable, what was the standard materials quantity per unit? (Round answer to 1 decimal place, i.e. 2.5.) pounds per unit What were the standard hours allowed for the units produced? If the labor quantity variance was $8,076 unfavorable, what were the actual direct labor hours worked? actual hours worked If the labor price variance was $14,280 favorable, what was the actual rate per hour? (Round computations and final answer to 2 decimal places, i.e. 10.25.) $ actual rate per hour If total budgeted manufacturing overhead was $375,000 at normal capacity, what was the predetermined overhead rate? (Round answer to 2 decimal places, i.e. 10.25.) $ predetermined overhead rate per direct labor hour What was the standard cost per unit of product? (Round computations and final answer to 2 decimal places, i.e. 10.25.)$ standard cost per unit How much overhead was applied to production during the year? $ overhead applied Using one or more answers above, what were the total costs assigned to work in process? $

Explanation / Answer

(a) (Std Price - Actual price) x Actual Quantity = 3930 (Std Price- 0.94) x 131000 = 3930 Std Price = $0.97 (b) (Std Qty - Actual Qty) x Std Price = -5100 (Std Qty - 131000) x 0.97 = -5100 Std Qty = 121970 kg Std Qty per unit = 121970/28400 = 4.29kg (c) Std Hours allowed = 28400 x 1.5 = 42,600 hours (d) (Std Hr - Act Hr) x Std Rate = -8076 (28400 x 1.5 - Act Hr) x 12 = -8076 511200 - 12 x Act Hr = -8076 Act Hr = 41,927 hours (e) (Std Rate - Act Rate) x Actual Hr = 14280 (12 - Act Rate) x 41927 = 14280 Actual Rate = $11.66 (f) Predetermined overhead rate = 375000/50000 = $7.5 per direct labor hour (g) Standard cost per unit of product Direct material: 4.29 x 0.97 = $4.16 Direct labor = 1.5 x 12 = $18 Overhead = 12 x 7.5 = $90 Std cost per unit = 90 + 18 + 4.16 = $112.16 (h) Overhead applied = 41927 x 7.5 = $314,453 (i) Total cost assigned to WIP = Direct cost = (4.16+18) x 28400 = $629344 Hope this helps!

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