Determine the standard cost per seal

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Reference no: EM13951751

Antikron Company produces rubber seals used in the aerospace industry. Standards call for 4 pounds of material at $3.50 per pound for each seal. The standard cost for labor is .6 hours at $21 per hour. Standard overhead is $8 per unit. For the year 2012, expected production is 120,000 seals with fixed overhead of $120,000 and variable overhead of $7 per seal. During 2012, a total of 110,000 seals were produced. The company purchased 450,000 pounds of material for $1,665,000.Production required 435,000 pounds of material. The cost of direct labor incurred was $1,452,000 with an actual average wage rate of $22 per hour. Actual overhead for the year was $955,000.

Required:

a. Determine the standard cost per seal.

b. Calculate the material, labor, and overhead variances.

c. Prepare a summary of the variances, and indicate which variances should be investigated.

Reference no: EM13951751

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