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Accounting and Finance Essentials. Presented by Bill Moylan. STANDARD COSTS. Ginny’s Vermont Treats. Ginny decides to start a business making and selling Vermont Maple Syrup and Maple Treats, and calls it “Ginny’s Vermont Treats” (GVT). GVT Standard Costs.

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Accounting and finance essentials

Accounting and Finance Essentials

Presented by

Bill Moylan



Ginny s vermont treats
Ginny’s Vermont Treats

  • Ginny decides to start a business making and selling Vermont Maple Syrup and Maple Treats, and calls it “Ginny’s Vermont Treats” (GVT)


Gvt standard costs
GVT Standard Costs

  • Let’s assume we make and sell two maple-based product lines:

  • Maple Syrup, available in 8 oz., 15 oz., and 24 oz. sizes

  • Maple Candy Gift Boxes, available in 2 oz. and 6 oz. sizes


Ginny s vermont treats1
Ginny’s Vermont Treats

  • Has lined up suppliers for maple syrup, jars, and labels for the Syrup product line, and confection mix and packaging for the Candy Gift Box product line

  • Plans to use local labor for product processing and packaging

  • She has supplier cost quotes, and her own time and motion studies for labor time requirement to fill/package product.


Standard cost
Standard Cost

  • An estimated or predetermined cost of performing an operation or producing a good or service, under normal conditions.


Standard cost1
Standard Cost

  • Standard costs are used as target costs (or basis for comparison with the actual costs), and are developed from historical data analysis or from time and motion studies.


Standard costs 6 oz gift box
Standard Costs: 6 oz. Gift Box

  • Mix: $4

  • Packaging: $1

  • Labor: $1

  • Total: $6


Gvt costs syrup line
GVT Costs—Syrup Line

  • Maple syrup (bulk): $319 (5 gallon drum)

  • Jars: 8 oz: $.76 15 oz: $.82 24 oz: $.94

  • Labels: $.022

  • Labor (time requirement) for Syrup (per jar): 8 oz: .85 minutes 15 oz: 1 minute 24 oz: 1.2 minutes

  • Labor Costs: $10/hr (standard). $15/hr (OT)


Gvt costs syrup line1
GVT Costs—Syrup Line

  • We know from experience that we “waste” about 10% of all syrup due to spillage, run off, etc. Further, experience shows us that 3% of all jars get scrapped, and 5% of labels have to be scrapped.

  • The cost of “waste” materials have to be factored in to the standard product cost.


Gvt costs candy gift box line
GVT Costs—Candy Gift Box Line

  • Confection mix: $113 (10 lb. sack)

  • Packaging: 2 oz box: $.82 6 oz box: $1.48

  • Labor (time requirement) for Gift Box Line (per box): 2 oz box: 2.5 minutes 6 oz: 5.0 minutes

  • Labor Costs: $10/hr (standard). $15/hr (OT)


Gvt costs candy gift box line1
GVT Costs—Candy Gift Box Line

  • Experience tells us we have these scrap levels for the Candy line:

  • 6% confection mix

  • 2% packaging


What are the standard costs
What are the Standard Costs?

  • 8 oz Syrup: ?

  • 15 oz Syrup: ?

  • 24 oz Syrup: ?

  • 2 oz Candy Gift Box: ?

  • 6 oz Candy Gift Box: ?


What are the standard costs1
What are the Standard Costs?

  • There is a tab on the Accounting Exercises Excel file with all these numbers.


Standard cost exercise answers
Standard Cost Exercise Answers

  • You’ll just have to come to class October 14!


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