Question

New Jersey Valve Company manufactured 7,800 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following: Direct labor 40,100 hr. at $14.60 per hr. Direct material purchased 25,000 lb. at $2.60 per lb. Direct material used 23,100 lb. The control valve has the following standard prime costs: Direct material 3 lb. at $2.50 per lb. $ 7.50 Direct labor 5 hr. at $15.00 per hr. 75.00 Standard prime cost per unit $ 82.50 Required: Prepare a schedule of standard production costs for January, based on actual production of 7,800 units. For the month of January, compute the following variances.

Answer 1

Answer:

Answer is given in the attachment.

Explanation:

Answer 2

The total standard production cost for New Jersey Valve Company is $643500.

How to calculate the production cost?

Direct material = $2.5 × 3 = $7.5

Actual output = 7800

Total standard direct material cost = 7800 × $7.5 = $58500

Direct labor = $5 × 15 = $75

Actual output = 7800

Total standard direct labor cost = 7800 × $75 = $585000

Total standard production cost will be:

= $585000 + $58500

= $643500

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