# BatCo makes metal baseball bat

BatCo makes metal baseball bats. Each bat requires 2.00 kg of aluminum at \$16 per kg and 0.35 direct labor hours at \$18 per hour. Overhead is assigned at the rate of \$32 per direct labor hour.

QS 23-5 Standard cost card LO C1

What amounts would appear on a standard cost card for BatCo?

 Qty per Unit Cost per Input Std. Cost per Unit Direct materials Direct labor Overhead

QS 23-6 Cost variances LO C2

Assume the actual cost to manufacture one metal bat is \$55.50. Compute the cost variance and classify it as favorable or unfavorable.

 Qty per Unit Cost per Input Total Direct materials Direct labor Overhead

Solution:-

QS 23-5Standard cost card LO C1

What amountswould appear on a standard cost card for BatCo?

 Qty per Unit Cost per Input Std. Cost perUnit Direct materials 2.00 kg \$16 per kg = 2 * 16 = \$32.00 Direct labor 0.35 hours \$18 per hour = 0.35 * 18 = \$6.3 Overhead 0.35 hours \$32 per direct labor hour = 0.35 * 32 = \$11.2 Total standard cost card for BatCo = \$32.00 + \$6.3 + \$11.2 = \$49.50

QS 23-6 Cost variances LOC2

Assume the actual cost tomanufacture one metal bat is \$55.50. Compute the cost variance andclassify it as favorable or unfavorable.

 Qty per Unit Cost per Input Std. Cost perUnit Direct materials 2.00 kg 16 per kg = 2 * 16 = \$32.00 Direct labor 0.35 hours \$18 per hour = 0.35 * 18 = \$6.3 Overhead 0.35 hours \$32 per direct labor hour = 0.35 * 32 = \$11.2 Total standard cost card for BatCo = \$32.00 + \$6.3 + \$11.2 = \$49.50
• Compared to actual cost standard cost is less . so, cost ofvariance is unfavorable .

Direct in cost = Actual cost – standard cost

where,

Actual cost = \$55.50

Standard cost = \$49.50

Cost of variance = \$55.50 \$49.50

= \$6

Cost of variance = \$6 ( unfavorable )

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