80.2K

Verified Solution

Link Copied!

Wonderful! Not only did our salespeople do a good job in meeting the sales budget this year, but our production people did a good job in controlling costs as well," said Kim Clark, president of Martell Company. "Our $31,600 overall manufacturing cost variance is only 5% of the $6,320,000 standard cost of products made during the year. That's well within the 3% parameter set by management for acceptable variances. It looks like everyone will be in line for a bonus this year." The company produces and sells a single product. The standard cost card for the product follows Standard Quantity or Hours Standard Price or Rate Standard Cost Inputs Direct materials Direct labor Variable overhead Fixed overhead 3.50 feet 2.80 per foot hours 12 per hour 2.00 per hour $ 9.80 33.60 5.60 16.80 $65.80 .8 hours $ 2.8 hours $6.00 per hour Total standard cost per unit The following additional information is available for the year just completed a. The company manufactured 20,000 units of product during the year. b. A total of 67,000 feet of material was purchased during the year at a cost of $3.00 per foot. All of this material was used to manufacture the 20,000 units produced. There were no beginning or ending inventories for the yean c. The company worked 58,000 direct labor-hours during the year at a direct labor cost of $11.80 per hour d. Overhead is applied to products on the basis of standard direct labor-hours. Data relating to manufacturing overhead costs follow

Answer & Explanation Solved by verified expert

See Answer