PROBLEMS:
Standard setting
Raw Materials
. Shampoo Company is a chemical manufacturer that supplies industrial users. The company plans to introduce a new chemical solution and needs to develop a standard product cost for this new solution.
The new chemical solution is made by combining a chemical compound (Nyclyn) and a solution (Salex), boiling the mixture; adding a second compound (Protet), and bottling the resulting solution in 20-liter containers. The initial mix, which is 20 liters in volume, consists of 24 kilograms of Nyclyn and 19.2 liters of Salex. A 20% reduction in volume occurs during the boiling process. The solution is then cooled slightly before 10 kilograms of ...view middle of the document...
P187.50
B. P183.75 D. P176.40
. The Vandana Company has a signature scarf for ladies that is very popular. Certain production and marketing data are indicated below:
Cost per yard of cloth P40.00
Allowance for rejected scarf 5% of production
Yards of cloth needed per scarf 0.475 yard
Airfreight from supplier P1.00/yard
Motor freight to customers P0.90 /scarf
Purchase discounts from supplier 3%
Sales discount to customers 2%
The allowance for rejected scarf is not part of the 0.475 yard of cloth per scarf. Rejects have no market value. Materials are used at the start of production.
Calculate the standard cost of cloth per scarf that Vandana Company should use in its cost sheets.
A. P19.85 C. P19.40
B. P20.00 D. P19.90
Direct labor
. Double M company is a chemical manufacturer that supplies various products to industrial users. The company plans to introduce a new chemical solution called Bysap, for which it needs to develop a standard product cost. The following labor information is available on the production of Bysap.
* The product, which is bottled in 10-liter containers, is primarily a mixture of Byclyn, Salex, and Protet.
* The finished product is highly unstable, and one 10-liter batch out of six is rejected at final inspection. Rejected batches have no commercial value and are thrown out.
* It takes a worker 35 minutes to process one 10-liter batch of Bysap. Employees work on eight-hour a day, including one hour per day for rest breaks and cleanup.
What is the standard labor time to produce one 10-liter batch of Bysap?
A. 35 minutes C. 48 minutes
B. 40 minutes D. 45 minutes
. The following direct labor information pertains to the manufacture of Part J35:
Number of hours required to make a part 2.5 DLH
Number of Direct workers 75
Number of total productive hours per week 3000
Weekly wages per worker P1,000
Laborers’ fringe benefits treated as direct labor costs 25% of wages
What is the standard direct labor cost per unit of Part J35?
A. P62.500 C. P41.670
B. P78.125 D. P84.125
Materials & Labor
Questions Nos. 7 and 8 are based on the following:
Supercold Company is a small producer of fruit-flavored frozen desserts. For many years, Supercold’s products have had strong regional sales on the basis of brand recognition. However, other companies have begun marketing similar products in the area, and price competition has become increasingly important. Haydee Mejia, the company’s controller, is planning to implement a standard costing system for Supercold and has gathered considerable information on production and material requirements for Supercold’s products. Haydee believes that the use of standard costing will allow Supercold to improve cost control and make better pricing decisions.
Supercold’s most popular products is strawberry sherbet. The sherbet is produced in 10-gallon batches, and each batch requires six quarts of good strawberries. ...
