A product uses 6 kilograms of raw material and takes two direct labour hours to make. Raw materials cost $2.50 per kilogram and direct labour is paid $4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were $120,000 and budgeted labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis. The full production cost per unit of product is: Question 4 options: 1) $25 2) $31 3) $35 4) $37
A product uses 6 kilograms of raw material and takes two direct labour hours to make. Raw materials cost $2.50 per kilogram and direct labour is paid $4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were $120,000 and budgeted labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis. The full production cost per unit of product is: Question 4 options: 1) $25 2) $31 3) $35 4) $37
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
A product uses 6 kilograms of raw material and takes two direct labour hours to make. Raw materials cost $2.50 per kilogram and direct labour is paid $4 per hour. Variable production overheads are 25% of labour costs. The budgeted fixed production costs for the year were $120,000 and budgeted labour hours were 20,000 hours. Fixed overheads are recovered on a direct labour hour basis.
The full production cost per unit of product is:
The full production cost per unit of product is:
Question 4 options:
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning