Sven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct materials at a cost of $593,800. It also incurred direct labor costs of $17,600 for the 2,200 hours worked by employees on the puppy meal crew. Manu- facturing overhead incurred at the puppy meal plant during April totaled $3,625, of which $2,450 was considered fixed. Sven's standard cost information for 1,000-pound batches of puppy meal is as follows. Direct materials standard price $4.20 per pound Standard quantity allowed per batch 1,020 pounds Direct labor standard rate $8.50 per hour Standard hours allowed per batch 14 direct labor hours Fixed overhead budgeted $2,800 per month Normal level of production 140 batches per month Variable overhead application rate $ 9.00 per batch Fixed overhead application rate ($2,800 ÷ 140 batches) 20.00 per batch Total overhead application rate $29.00 per batch

Sven Enterprises is a large producer of gourmet pet food. During April, it produced 147 batches of puppy meal. Each batch weighs 1,000 pounds. To produce this quantity of output, the company purchased and used 148,450 pounds of direct materials at a cost of $593,800. It also incurred direct labor costs of $17,600 for the 2,200 hours worked by employees on the puppy meal crew. Manu- facturing overhead incurred at the puppy meal plant during April totaled $3,625, of which $2,450 was considered fixed. Sven's standard cost information for 1,000-pound batches of puppy meal is as follows. Direct materials standard price $4.20 per pound Standard quantity allowed per batch 1,020 pounds Direct labor standard rate $8.50 per hour Standard hours allowed per batch 14 direct labor hours Fixed overhead budgeted $2,800 per month Normal level of production 140 batches per month Variable overhead application rate $ 9.00 per batch Fixed overhead application rate ($2,800 ÷ 140 batches) 20.00 per batch Total overhead application rate $29.00 per batch

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...

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