29 Jun Question Clean sweep company produc
Question
Clean sweep company produces all-vinyl mats. Each doormat calls for .5 meter of vinyl material. The material should cost $3 per meter. Standard direct labor hours and labor cost per doormat are .3 hour and $6 (.3 X$20 per hour). Currently the standard variable overhead rate is $1.5 per direct labor hour, and its standard fixed overhead rate is .8 per direct labor hour.
In August, the division manufactured and sold 50,000 doormats. Duing the month, it used 25,200 meters of vinyl material; the total cost of the material was $73,080. The total overhead costs for August were $28,200, of which $18,200 was variable. The total number of direct labor hours worked was 10,800 and the factory payroll for direct labor for the month was $214,920. Budgeted fixed overhead for August was $9,280. Normal monthly capacity for the year was set at 58,000 doormats.
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