Hal’s Heating produces furnaces for commercial buildings. The company’s master b

Question

Hal’s Heating produces furnaces for commercial buildings. The company’s master budget shows the following standards information.

Expected production for January:

300 furnaces

Direct materials

3 heating elements at $40 per element

Direct labor

35 hours per furnace at $18 per hour

Variable manufacturing overhead

35 direct labor hours per furnace at $15 per hour

Calculate the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead.

Assume Hal’s Heating produced 320 furnaces during January. Prepare a flexible budget for direct materials, direct labor, and variable manufacturing overhead.

Expected production for January:

300 furnaces

Direct materials

3 heating elements at $40 per element

Direct labor

35 hours per furnace at $18 per hour

Variable manufacturing overhead

35 direct labor hours per furnace at $15 per hour

Explanation / Answer

standard cost per unit for direct materials, direct labor, and variable manufacturing overhead

Hal’s Heating produced 320 furnaces during January (flexible budget

Standard cost per unit Direct materials (3*40) 120 Direct labor (35*18) 630 Variable manufacturing overhead (35*15) 525 Standard variable production per unit 1275

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