Black Meter

Case 19-2 Black Meter Company

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Category: Business

Autor: simba 04 February 2012

Words: 412 | Pages: 2

Question 1

Illustration A19-2: Foundry Standard Cost

1. Material Cost = 101.92: because costs are calculated for a lot of 100 units, the standard cost of phosphor bronze is 1.12 per pound and one unit uses 0.91 pounds.

100x0.91x1.12=101.92

2. Pattern Cost=15

3. Standard hours per 100 pcs=87.12

4. Standard Rate per hour=18

5. Total foundry standard cost: sum of material cost, pattern, molding cost, grinding cost and snagging cost=101.92+15+87.12+18+27.20= 249.24

Illustration A19-3: Parts Department Standard Cost

1. Material Cost=249.24

2. Standard hours per 100 pcs=0.75 0.55 0.93 0.47 0.17 5.00 0.20 0.30 0.47 0.50 5.80

3. Standard Rate per hour=42.9 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3 40.3

4. Total Parts Department Standard Cost

= sum of material cost, and the total of operations and tools costs

= 249.24+32.18+22.17+37.48+18.94+6.85+201.50+8.06+12.09+18.94+233.74=861.34

Illustration A19-4: Assembly Department Standard Cost

Total Assembly Department Standard Costs

= sum of parts of assembly costs and operations and tools standard costs under the assembly department

=861.34+247.20+227.73+448.47+968.35+284.60+1,135.29+90+30+24+11.12+40.41+18.45+

39.45+28.38+236.25+155.25+189.00=5,035.29

Question 2

In a standard cost system, each year, a base is predetermined. This base won't change during one year even if material, labor and overhead change. The cost of each product, parts, components comes from these calculations and uses in each accounting files of the company.

However, if an actual cost system is set up, all calculations should be updating during the year. That represents a lot of work and recordkeeping.

Despite of this disadvantage, an actual cost system is more accurate than a standard cost system. This is more useful to management!

Question 4

If...