Question 2 Jordan Company plans to sell 135,339 wnins in ovemiber and 1800ites D

Question

Question 2 Jordan Company plans to sell 135,339 wnins in ovemiber and 1800ites December, Jordan's policy is that 10% or the following month's sales most be n ming inventory. On November 1, there were 14,000its in inventory It takes 30 minutes of direct labon time to make one umit Direct labor wages average SI7 Per hour. WHAT IS THE DIRECT LABOR COST BUDGETED FOR NOVEMBER? Question # 3 purshased 19s pounds of Sour $150 er pound During the month of Novesikvers, Ryan's Engress the end of hoveber, Pyn's Express found Shat it had sn sndeorsprice vrnce of THE STANDARD COST PER POND MUST

Explanation / Answer

Solution 1 - Calculation of Direct labour budgeted cost

Calculation of Production units in November

Calculation of Labour cost budgeted

Total Hour required per unit

(139000 units *0.5 hour per unit)

Total Direct Labour cost budgeted

(69500 hours * $17 per hour)

Solution 2 - Calculation of Standard price per pound

Material price variance = (Standard price - Actual price)*Actual quantity

Here, Material price variance = $500 U

Actual price per pound = $1

Actual Pound purchased = 10000

Standard price per pound = Required = Let 'X'

Trick = Since Variance is unfavourable hence Actual price per pound will always be higher than standard price per pound

Putting values in formula :-

500 U = (x - $1) * 10000

500 U = 10000x - $10000

10000x = $9500

X = $0.95

Particulars Units Sales units 135000 Add : Closing Inventory (180000 * 10%) 18000 Less : Opening Inventory 14000 Production units 139000

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