EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

5. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD 5. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH10 STANDARD COST AND THE BALANCE SCORECARD
5. The first step in computing the standard direct labor rate is to determine the standard direct labor-hours allowed for the month’s production. The standard direct labor-hours can be computed by working with the vari-able manufacturing overhead costs, since they are based on direct la-bor-hours worked: Standard variable manufacturing overhead cost for March (a) ... $4,200Standard variable manufacturing overhead rate per direct labor-hour (b)... $3.00Standard direct labor-hours for March (a) ÷ (b)... 1,400Total standard direct labor cost for March = $10,500Total standard direct labor-hours for March 1,400 DLHs=$7.50 per DLHProblem 10-26 (continued)