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Cole Laboratories makes and sells a lawn fertilizer called Fastgro The company has developed standard costs for one bag of Fastgro as follows Standard Quantity Standard Cost per bag Direct

Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

 

 

 

 

 

 

Standard Quantity

 

 

Standard Cost per bag

 

 

Direct material

 

 

20 pounds

 

 

$8.00

 

 

Direct labor

 

 

0.1 hours

 

 

$1.10

 

 

Variable overhead

 

 

0.1 hours

 

 

$0.40

 

 

 

 

 

The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:

 

 

- Production of Fastgro: 4,000 bags

 

 

- Direct materials purchased: 85,000 pounds at a cost of $32,300

 

 

- Direct-labor worked: 390 hours at a cost of $4,875

 

 

- Variable overhead incurred: $1,475

 

 

- Inventory of direct materials on January 31: 3,000 pounds

 

 

The materials price variance for January is

Jun 23 2020 View more View Less

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