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Category > Accounting Posted 19 Aug 2017 My Price 7.00

Botella Company

Problem 10-47     Standard Costing

Botella Company produces plastic bottles. The unit for costing purposes is a case of 18 bottles. The following standards for producing one case of bottles have been established:

Direct materials (4 lbs. @ $0.95)                                   $ 3.80

Direct labor (1.25 hours @ $15.00)                                18.75

Standard prime cost                                                         22.55

 

During December, 78,000 pounds of material were purchased and used in production. There were 15,000 cases produced, with the following actual prime costs:

Direct materials                                             $ 74,000

Direct labor                                                   $315,000 (for 22,500 hrs.)

 

Required:

1.       Compute the materials variances.

2.       Compute the labor variances.

3.       CONCEPTUAL CONNECTION What are the advantages and disadvantages that can result from the use of a standard costing system?

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Status NEW Posted 19 Aug 2017 03:08 PM My Price 7.00

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