Vitex, Inc. manufactures a popular consumer product and it has provided the foll

Question

Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

Inputs (1) Standard Quantity or Hours (2)
Standard
Price
or Rate Standard
Cost
(1) × (2) Direct materials 2.40 pounds $ 16.10 per pound $ 38.64 Direct labor 1.00 hours $ 15.70 per hour $ 15.70 Variable manufacturing overhead 1.00 hours $ 9.50 per hour $ 9.50 Total standard cost per unit $ 63.84

Explanation / Answer

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Though requirement in question not mentioned, calculated few things based on experience

Part-1 No of Units Produced Standard Material Cost 734160 Standard Material Cost per unit 38.64 No of Units Produced (734160/38.64) 19000 Part-2 Let actual requirement for unit is x Direct Material Quantity Variance (SQ-AQ)*SR -32200 ((19000*2.4)-(19000*x))*16.1 -32200 (45600-19000x)*16.1 =-32200/16.1 (45600-19000x) -2000 (45600-19000x) 19000x 45600+2000 19000x 47600 x                                                  2.51 Direct Material Purchased and used 19000*x        47,600             2,000 32,200.00 Part-3 Standard Quantity 19000*2.4 45600 Direct Material Price Variance (SR-AR)*SQ 13804 (16.1-AR)*45600 13804 734160-45600AR 45600AR 734160-13804 45600AR 720356 AR                                               15.80 Actual Cost per Pound                                               15.80 Part-4 Direct Labor Efficiency Variance (SH-AH)*SR -15700 ((19000*1)-(19000*x))*15.7 -15700 (19000-19000x)*15.7 =-15700/15.7 (19000-19000x) -1000 (19000-19000x) 19000x 19000+1000 19000x 20000 x                                                  1.05 Actual Direct Labor Hours 19000*x Part-5 Standard Quantity 19000*1 19000 Direct Material Price Variance (SR-AR)*SQ -4000 (15.7-AR)*19000 -4000 298300-19000AR 19000AR 298300+4000 19000AR 302300 AR                                               15.91 Actual Cost per Pound                                               15.91

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