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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Standard Quantities Allowed of Labor and Materials

Miel Company produces ready-to-cook oatmeal. Each carton of oatmeal requires 16 ounces of rolled oats per carton (the unit quantity standard) and 0.04 labor hour (the unit labor standard). During the year, 960,000 cartons of oatmeal were produced.

Required:

  1. 1. Calculate the total amount of oats allowed for the actual output.
  2. 2. Calculate the total amount of labor hours allowed for the actual output.

1.

To determine

Compute the total amount of oats allowed.

Explanation

Standard Quantity of Materials Allowed:

Input quantity required to produce a unit of output is termed unit quantity standard. This is evaluated to compute total inputs that are allowed to produce actual output. Standard quantity of materials allowed is computed to understand variances.

Use the following formula to calculate the amount of standard quantity:

Standard Quantity=Unit Quantity Standard×Actual Output

Substitute 16 ounces for unit quantity standard and 960,000 for actual output in the above formula

2.

To determine

Compute the total amount of labor hours.

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