Question

Stillwater designs rebuilds defective units of its S12L7 kicker speaker model. During the year, stillwater rebuilt 7,500 units. Materials and labor standards for performing the repairs are as follows:
Direct materials {1 recon kit @ $150 $150.00

Direct materials {1 cabinet @ $50} 50.00

Direct labor {5 hours @ $12 60.00

1. Compute the standard hours allowed for a volume of 7,500 rebuilt units.

2. Compute the standard number of kits and cabinets allowed for a volume of 7,500 rebuilt units.

3. Suppose the during the first month of the year, 3,750 standard hours were allowed for the units rebuilt. How many units were rebuilt during thenfirst month?

Answer 1

Answer:

(1) 37,500 hours

(2) 7,500 kits

(3) 750 units

Explanation:

(1) Standard Hours allowed for 7500 rebuilt units:

= 7,500 × Direct labor hours

= 7,500 × 5 hours

= 37,500 hours

(2) Standard number of kits:

= 7,500 x 1 kits

= 7,500 kits

Standard number of cabinets:

= 7500 × 1 kits

= 7500 kits

(3) Number of units rebuilt:

= standard hours allowed for the units rebuilt ÷ Direct labor hours

= 3,750 ÷ 5

= 750 units