Question

1.Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per...

1.Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 70-gallon batch.

2,700 ounces of grape concentrate at $0.04 per ounce
77 pounds of granulated sugar at $0.43 per pound
133 lemons at $0.79 each
350 yeast tablets at $0.24 each
350 nutrient tablets at $0.14 each
2,500 ounces of water at $0.001 per ounce


Hank estimates that 4% of the grape concentrate is wasted, 9% of the sugar is lost, and 32% of the lemons cannot be used.

Standard Cost Per Gallon?

2.

Stefani Company has gathered the following information about its product.

Direct materials: Each unit of product contains 3.10 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.30 pounds. Materials cost $2 per pound, but Stefani always takes the 4.00% cash discount all of its suppliers offer. Freight costs average $0.45 per pound.

Direct labor. Each unit requires 1.30 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $12.50. Payroll taxes and fringe benefits are an additional $2.40 per hour.

Manufacturing overhead. Overhead is applied at a rate of $7.20 per direct labor hour.

Total standard cost per unit?

3.Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data.

Variable Costs

Fixed Costs

Indirect materials $11,200 Supervisory salaries $35,600
Indirect labor 10,600 Depreciation 7,000
Utilities 7,000 Property taxes and insurance 7,100
Maintenance 5,700 Maintenance 5,500


Actual variable costs were indirect materials $14,500, indirect labor $9,600, utilities $9,400, and maintenance $5,200. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.

All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.

(a) Prepare a manufacturing overhead flexible budget report for the first quarter

Homework Answers

Answer #1

1

Quantity

Per unit
Cost

Total
Cost

Waste
Lost (%)

Effective
Production
(%)

Standard
Cost

(A)

(B)

(C=AxB)

(D)

(E=100-D)

F=C/E

grape concentrate

2700

0.04

108

4%

96%

112.5

granulated sugar

77

0.43

33.11

9%

91%

36.4

lemons

133

0.79

105.07

32%

68%

154.5

yeast tablets

350

0.24

84

100%

84

nutrient tablets

350

0.14

49

100%

49

water

2500

0.001

2.5

100%

2.5

Total

438.9

The total standard cost of ingredients is $438.9

Calculation for the standard cost per gallon

standard cost per gallon

=Total Standard cost/ Number of gallon per batch

=438.9/70

=6.27

Standard Cost Per Gallon

6.27

Note: As this question has more then one question so as per guideline I have answered the first question

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