FIN 405 - Problem - E22-2 - Compute standard materials costs., E22-7 - Compute materials and labor variances., P22-2A - Compute variances, and prepare income statement.

E22-2 - Compute standard materials costs.

Jim Hetzel manufactures and sells homemade wine, and he wants to develop a standard cost per gallon.

The following are required for production of a50-gallon batch.

3,000 ounces of grape concentrate at$0.040 per ounce

54 pounds of granulated sugar at0.350 per pound

60 lemons at0.600 each

50 yeast tablets at0.250 each

50 nutrient tablets at0.200 each

2,500 ounces of water at0.004 per ounce

Jim estimates that4%of the grape concentrate is wasted,10%of the sugar is lost, and

20%of the lemons cannot be used.

E22-7 - Compute materials and labor variances.

Shannon Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.

Direct materials         (8 pounds at$2.50 per pound)$20.00

Direct labor               (3 hours at$12.00 per hour)$36.00

During the month of April, the company manufactures230 units and incurs the following actual costs.

Direct materials purchased and used                      (1,900 pounds)$4,940.00

Direct labor             (700 hours)$8,120.00

Instructions: (For "Item", insert "SP" for Standard Price, "SQ" for Standard Quantity, "AP" for Actual Price, "AQ" for Actual Quantity, "AH" for Actual Hours, "AR" for Actual Rate, "SH" for Standard Hours, and "SR" for Standard Rate.)

P22-2A - Compute variances, and prepare income statement.

Martinez Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2012.

Costs and Production DataActualStandard

Raw materials unit cost$2.25 $2.00

Raw materials units used10,600 10,000

Direct labor payroll$122,400 $120,000

Direct labor hours worked14,400 15,000

Manufacturing overhead incurred$184,500

Manufacturing overhead applied$189,000

Machine hours expected to be used at normal capacity42,500

Budgeted fixed overhead for June$51,000

Variable overhead rate per hour$3.00

Fixed overhead rate per hour$1.20

Overhead is applied on the basis of standard machine hours.3hours of machine time are

required for each direct labor hour. The jobs were sold for$400,000 Selling and administrative

expenses were$40,000 Assume that the amount of raw materials purchased equaled the amount used.

Instructions: (For "Item", insert "SP" for Standard Price, "SQ" for Standard Quantity, "AP" for Actual Price, "AQ" for Actual Quantity, "AH" for Actual Hours, "AR" for Actual Rate, "SH" for Standard Hours, "SR" for Standard Rate, "FOR" for Factory Overhead Rate, "NCH" for Normal Capacity Hours, and "SHA" for Standard Hours Allowed.)