Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis):
Raw Material | Standard Labor Time | ||||
Product | X442 | Y661 | Sintering | Finishing | |
Alpha6 | 2.0 kilos | 1.5 liters | 0.10 hours | 0.80 hours | |
Zeta7 | 3.0 kilos | 2.5 liters | 0.45 hours | 0.90 hours | |
Information relating to materials purchased and materials used in production during May follows:
Material | Purchases | Purchase Cost | Standard Price |
Used in Production |
|||
X442 | 14,800 | kilos | $66,600 | $4.30 | per kilo | 9,300 | kilos |
Y661 | 15,800 | liters | $23,700 | $1.60 | per liter | 13,800 | liters |
The following additional information is available:
The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing.
During May, 1,220 direct labor-hours were worked in Sintering at a total labor cost of $28,060, and 2,930 direct labor-hours were worked in Finishing at a total labor cost of $67,390.
Production during May was 2,300 Alpha6s and 1,600 Zeta7s.
Required:
1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor.
Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.)
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2. Compute the materials price and quantity variances for each material.
Compute the materials price and quantity variances for each material. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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3. Compute the labor rate and efficiency variances for each operation.
Compute the labor rate and efficiency variances for each operation. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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Part-1:: Mickley Corporation | ||||||
Standard | Standard | Standard | ||||
Quantity or Hours (A) | Price or Rate (B) | Cost (AXB) | ||||
Alpha6: | ||||||
Direct materials-X442 | 2 | kilos | $4.30 | per kilo | $8.60 | |
Direct materials-Y661 | 1.5 | litres | $1.60 | per litre | $2.40 | |
Direct labor-Sintering | 0.1 | hours | $22.00 | per hour | $2.20 | |
Direct labor-Finishing | 0.8 | hours | $21.00 | per hour | $16.80 | |
tal | $30.00 | |||||
Zeta7: | ||||||
Direct materials-X442 | 3 | kilos | $4.30 | per kilo | $12.90 | |
Direct materials-Y661 | 2.5 | litres | $1.60 | per litre | $4.00 | |
Direct labor-Sintering | 0.45 | hours | $22.00 | per hour | $9.90 | |
Direct labor-Finishing | 0.9 | hours | $21.00 | per hour | $18.90 | |
Totaal | $45.70 |
Part-2 |
2. Material price variance = [SP-AP] x AQ purchased |
Material X442 = [$4.30 - $4.50] x 14800 = $2960 U |
Material Y661 = [$1.60 - $1.50] x 15800 = $1580 F |
Material quantity variance = [SQ-AQ used] x SP |
Material X442 = [{(2 x 2300) + (3 x 1600)} - 9300] x $4.30 = $430 F |
Material Y661 = [{(1.5 x 2300) + (2.5 x 1600)} - 13800] x $1.60 = $10160 U |
* X442 Actual Price per Kilos = 66600/14800=$4.50 |
**Y661, Actual Price Per Litre = 23700/15800=$1.50/ Litre |
Direct material variance - Material X442 | |
Material price variance | 2960U |
Material quantity variance | 430F |
Direct material variance - Material Y661 | |
Material price variance | 1580F |
Material quantity variance | 10160U |
Part-3 |
3. Direct labor rate variance = [SR-AR] x AH worked |
Sintering = [22 - 23] x 1220 = $2080 U |
Finishing = [21 - 23] x 2930 = $5920 U |
*Actual Rate/ Hour for Sintering :- $28060/1220=$23 |
**Actual Rate/ Hour for Finishing :- $67390/2930=$23 |
Direct labor efficiency variance = [SH-AH] x SR |
Sintering = [{(0.10 x 2300) + (0.45 x 1600)} - 1220] x $22 = $5940 U |
Finishing = [{0.80 x 2300) + (0.90 x 1600)} - 2930] x $21 = $7350 F |
Direct labor variances - Sintering: | |
Labor rate variance | 2080U |
Labor efficiency variance | 5940U |
Direct labor variances - Finishing: | |
Labor rate variance | 5920U |
Labor efficiency variance | 7350 F |
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing....
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Finishing 0.90 hours Sintering Y661 1.5 liters Product X442 2.0 kilos Alpha6 0.30 hours 4.0 kilos 3.0 liters Zeta7 0.40 hours 1.00 hours Information relating to materials purchased and...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materlals-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material standard Labor Time sintering Finishing e.9 hours e.80 hours Product X442 Y661 2.5 liters 3.5 liters Alpha6 Zeta7 1.5 kilos e.20 hours 3.5 kilos e.35 hours Information relating to materials purchased and materlals...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 1.5 kilos 2.0 liters 0.20 hours 0.80 hours Zeta7 3.5 kilos 4.0 liters 0.40 hours 0.90 hours Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Sintering 0.20 hours Finishing Product X442 Y661 Alpha6 2.5 kilos 2.5 liters 0.90 hours 4.5 kilos 3.5 liters 0.30 hours 1.20 hours Zeta7 Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing Each of the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis) Raw Material Standard Labor Time Y661 1.5 liters 2.5 liters Product Alpha6 Zeta7 X442 2.0 kilos 3.0 kilos Sintering 0.10 hours 0.45 hours Finishing 0.80 hours 0.90 hours Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 2.0 kilos 1.5 liters 0.30 hours 0.90 hours Zeta7 4.0 kilos 3.0 liters 0.40 hours 1.00 hours Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing Each of the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Sintering e.20 hours e.40 hours Product X442 Y661 2.5 liters 4.0 liters Finishing e.8e hours 1.20 hours Alpha6 Zeta7 2.5 kilos 4.5 kilos Dok ences Information relating to materials purchased...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 1.8 kilos 2.0 liters 0.20 hours 0.80 hours Zeta7 3.0 kilos 4.5 liters 0.35 hours 0.90 hours Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 1.8 kilos 2.0 liters 0.20 hours 0.80 hours Zeta7 3.0 kilos 4.5 liters 0.35 hours 0.90 hours Information relating to materials purchased and materials...
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 1.5 kilos 2.2 liters 0.40 hours 0.80 hours Zeta7 3.5 kilos 4.4 liters 0.30 hours 0.90 hours Information relating to materials purchased and materials...