Answer
Actual DATA for |
4200 |
units |
|
Quantity (AQ) |
Rate (AR) |
Actual Cost |
|
Direct Material |
9700 |
$ 24.45 |
$ 237,165.00 |
Direct labor |
3150 |
$ 12.00 |
$ 37,800.00 |
Variable Overhead |
3150 |
$ 1.33 |
$ 4,200.00 |
Standard DATA for |
4200 |
units |
|
Quantity (SQ) |
Rate (SR) |
Standard Cost |
|
[A] |
[B] |
[A x B] |
|
Direct Material |
( 2.3 ounces x 4200 units)=9660 ounces |
$ 26.00 |
$ 251,160.00 |
Direct labor |
( 0.5 hours x 4200 units)=2100 hours |
$ 14.00 |
$ 29,400.00 |
Variable Overhead |
( 0.5 hours x 4200 units)=2100 hours |
$ 3.40 |
$ 7,140.00 |
Part A
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
( |
$ 26.00 |
- |
$ 24.45 |
) |
x |
9700 |
15035 |
||||||
Variance |
$ 15,035.00 |
Favourable-F |
||||
Material Quantity Variance |
||||||
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
( |
9660 |
- |
9700 |
) |
x |
$ 26.00 |
-1040 |
||||||
Variance |
$ 1,040.00 |
Unfavourable-U |
Part B
YES, it is recommended because the prices offered by the seller are LESS than the standard price of material.
Part A
Labor Rate Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
( |
$ 14.00 |
- |
$ 12.00 |
) |
x |
3150 |
6300 |
||||||
Variance |
$ 6,300.00 |
Favourable-F |
||||
Labour Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
2100 |
- |
3150 |
) |
x |
$ 14.00 |
-14700 |
||||||
Variance |
$ 14,700.00 |
Unfavourable-U |
Part B
NO, it is not recommended, because this has led to lower efficiencies among workers, as evident by Unfavourable Efficiency Variance, calculated above.
Variable Overhead Rate Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
( |
$ 3.40 |
- |
$ 1.33 |
) |
x |
3150 |
6510 |
||||||
Variance |
$ 6,510.00 |
Favourable-F |
||||
Variable Overhead Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
2100 |
- |
3150 |
) |
x |
$ 3.40 |
-3570 |
||||||
Variance |
$ 3,570.00 |
Unfavourable-U |
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.30 ounces $ 26.00 per ounce $ 59.80 Direct labor 0.50 hours $ 14.00 per hour 7.00 Variable manufacturing overhead 0.50 hours $ 3.40 per hour 1.70 Total standard cost per unit $ 68.50...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.30 ounces $ 26.00 per ounce $ 59.80 Direct labor 0.50 hours $ 14.00 per hour 7.00 Variable manufacturing overhead 0.50 hours $ 3.40 per hour 1.70 Total standard cost per unit $ 68.50...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.30 ounces $ 26.00 per ounce $ 59.80 Direct labor 0.50 hours $ 14.00 per hour 7.00 Variable manufacturing overhead 0.50 hours $ 3.40 per hour 1.70 Total standard cost per unit $ 68.50...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity Standard ptice Standard or Hours or Rate Cost Direct materials 2.30 ounces $26.00 per ounce $59.80 Direct labor 0.50 hours $14.00 per hour 7.00 Variable manufacturing overhead 0.50 hours $ 3.40 per hour 1.70 Total standard cost per unit $68.50 During November, the following...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity Standard Price Standard or Hours 2.30 ounces or Rate $26.00 per ounce Cost Direct materials $59.80 Direct labor 0.50 hours $14.00 per hour 7.00 $3.40 per hour Variable manufacturing overhead 0.50 hours 1.70 Total standard cost per unit $68.50 During November, the following activity...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.60 ounces $ 29.00 per ounce $ 75.40 Direct labor 0.60 hours $ 12.00 per hour 7.20 Variable manufacturing overhead 0.60 hours $ 3.50 per hour 2.10 Total standard cost per unit $ 84.70...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 27.00 per ounce $ 64.80 Direct labor 0.60 hours $ 12.00 per hour 7.20 Variable manufacturing overhead 0.60 hours $ 3.50 per hour 2.10 Total standard cost per unit $ 74.10...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.20 ounces $ 23.00 per ounce $ 50.60 Direct labor 0.60 hours $ 14.00 per hour 8.40 Variable manufacturing overhead 0.60 hours $ 2.50 per hour 1.50 Total standard cost per unit $ 60.50...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.20 ounces $ 23.00 per ounce $ 50.60 Direct labor 0.60 hours $ 14.00 per hour 8.40 Variable manufacturing overhead 0.60 hours $ 2.50 per hour 1.50 Total standard cost per unit $ 60.50...
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 21.00 per ounce $ 50.40 Direct labor 0.80 hours $ 15.00 per hour 12.00 Variable manufacturing overhead 0.80 hours $ 3.50 per hour 2.80 Total standard cost per unit $ 65.20...