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Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows:
Direct materials (1 electronic component kit @ $185) $185
Direct materials (2 plastic casings @ $45) 90
Direct labor (8 hours @ $15)120
Required:
Problem A. Compute the standards hours allowed for a volume of 7,000 stereos and the planned cost.Problem B. Compute the standard number of kits and casings allowed for a value of 7,000 units and the planned cost for each direct material.
Problem C. Compute the total budget variances for materials and labor assuming that actual number of electronic kits purchased and used were 7,300 at a price of $179 and actual plastic casings purchased were 14,400 at a price of $43. Actual labor was 57,200 hours at $15.75 per hour.
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