Question C10.46

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Question C10.46

Answered Same Day Dec 24, 2021

Solution

Robert answered on Dec 24 2021

119 Votes

QUESTION 1:
Develop the standard cost for direct material and direct labor of one cutting board.
SOLUTION 1:
Standard Cost for one board:
Particulars Amount
Materials:
Timber (1.5metre * $7.50 per meter) $ 11.25
Foot Pad (4 * $0.05) $ 0.20
Total Materials $ 11.45
Normal Loss ($11.45 / 10) $ 1.15
Total Standard Cost of Materials $ 12.60
Labor:
Direct (24mins @ $25 per hour) $ 10.00
Indirect (30 mins @ $25 per hour) $ 12.50
Total Labor $ 22.50
Normal Loss ($22.5 / 10) $ 2.25
Total Standard Cost of Labor $ 24.75
Total Standard Cost $ 37.35
QUESTION 2:
Explain the role of each of the following people in developing the standards:
a) Purchasing Manager
) Production Manager
c) Management Accountant
SOLUTION 2:
a) Purchasing Manager: An employee of an organization who is engaged in purchase or
permitting purchase of goods and services needed by company. He is responsible for
dealing with suppliers and overlooking purchase of raw materials needed in production,
general supplies for office and facilities, equipment or construction contracts. He plays a
crucial role in getting appropriate quality of material in required quantity at right time.
The main role of purchase manager in fixing standard is to get materials at comparatively
low prices without compromising on quality of goods purchased. In formulating
standards, cost of raw materials on estimated basis is required and it can be obtained from
purchase manager. He can estimate the same on the basis of past experience, cu
ent
market conditions. Thus, purchase manager plays a substantial role in calculating direct
material cost.
) Production Manager: The role of production manager is to plan, coordinate and control
production process....

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