Question

Chic Design allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 2,000 flower pots: 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Direct materials ............... . Purchased 27,900 pounds at a cost of $3.40 per pound; Used 27,400 pounds to produce 2,000 pots Direct labor Worked 4.5 hours per flower pot (9,000 total DLH) at a cost of $11.00 per hour Actual variable manufacturing overhead .... $3.50 per direct labor hour for total actual variable manufacturing overhead of $31,500 Actual fixed manufacturing overhead ....... $37,500 Standard fixed manufacturing overhead allocated based on actual production ... $40.000

Answer 1

Requirement 1

Direct material	10.2 pounds	X	$ 3.5 per pound	=	$ 35.70
Direct labor	1.8 hours	X	$ 15.5 per hour	=	$ 27.90
Variable manufacturing overhead	1.8 hours	X	$ 3.8 per hour	=	$   6.84
Fixed manufacturing overhead	1.8 hours	X	$ 6.15 per hour	=	$ 11.07

Requirement 2

Direct material	$ 35.70
Direct labor	$ 27.90
Variable manufacturing overhead	$   6.84
Fixed manufacturing overhead	$ 11.07
Standard Cost	$ 81.51

In case of any doubt, please comment.