Question

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): Product Alpha 6 Zeta 7 Raw Material X442 Y661 1.2 kilos 2.0 liters 3.0 kilos 4.0 liters Standard Labor Time Sintering Finishing 0.40 hours 0.80 hours 0.10 hours 0.60 hours Information relating to materials purchased and materials used in production during May follows: Standard Material X442 Y661 Purchase Purchases Cost 14,500 kilos $60,900 15,500 liters $27,900 Used in Production 9,000 kilos 13,500 liters $4.00 per kilo $1.90 per liter The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $21.00 per hour in Sintering and $19.50 per hour in Finishing c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $28,750, and 2,900 direct labor-hours were worked in Finishing at a total labor cost of $62,350. d. Production during May was 2,000 Alphabs and 2,250 Zeta7s. Required: 1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. 2. Compute the materials price and quantity variances for each material. 3. Compute the labor rate and efficiency variances for each operation. Complete this question by entering your answers in the tabs below.

Answer 1

Solutions:

A B C D E F | Η Standard Price or Rate Standard Cost 4.80 10 3.80 1.20 kilos 2.00 liters 0.40 hours 0.80 hours 4.00 per kilo 1.90 per liter 21.00 per hour 19.50 per hour 11 8.40 15.60 32.60 13 14 Alphab: Direct materials-X442 Direct materials-Y661 Direct labor-Sintering Direct labor-Finishing Total Zeta: Direct materials-X442 Direct materials-Y661 Direct labor-Sintering Direct labor-Finishing Total 3.00 kilos 4.00 liters 0.10 hours 0.60 hours 4.00 per kilo 1.90 per liter 21.00 per hour 19.50 per hour 16 17 18 19 20 21 12.00 7.60 2.10 11.70 33.40 Working : ---- 23 Direct Materials Variances Direct Materials Variances-Material X442: Materials price variance Materials quantity variance Direct Materials Variances-Material Y661: Materials price variance Materials quantity variance $2,900 u $600F Ас AQ 14500 25 26 27 $1,550 F $9500 28 Working : ---- Standard AQ 9000 29 30 31 32 33 34 35 36 Direct Labor Variances Direct Labor Variances-Sintering: Labor rate variance Labor efficiency variance Direct Labor Variances-Finishing: Labor rate variance Labor efficiency variance $2,500 u $4,725 u $5,800 u $975F E265 (6) Sheet295 Sheet294 Sheet296 Sheet297 Sheet299 Sheet300 Sheet301

Working:

M I N Q U V - W X Y AO Material X442: Price Variance Actual Cost Purchased) Standard cost for actual quantity AQ AP АО SP 14500 $4.20 14500 * $4.00 $60,900 $58,000 $2,900 U Material Y661: Price Variance Actual Cost (Purchased) Standard cost for actual quantity AQ AP * SP 15500 $1.80 15500 $1.90 $27,900 $29,450 $1,550 F Standard Cost SP SP Material X442: Quantity Variance Standard cost for actual quantity (Used) AQ SQ 9000 $4.00 9150 $36,000 $600 F Material Y661: Quantity Variance Standard cost for actual quantity (Used) | Standard Cost AQ 1 * I SP SO 13500 $1.90 13000 $25,6501 $24,700 $950 U $4.00 $1.90 $36,600 33 35 Actual Cost AH 1250 AR $23.00 Sintering: Direct Labor Variances Standard cost for actual quantity AH SR 1250 $21.00 $26,250 Standard Cost SHI 1025 | $21,525 T SR $21.00 $28,750 $2,500 $4,725 Actual Cost Standard Cost AH 2900 SH Finishing: Direct Labor Variances Standard cost for actual quantity AH SR 2900 $19.50 $56,550 AR $21.50 SR $19.50 2950 $62,350 $57,525 50 $5,800 I $975 F 51 E265 (6) Sheet295 Sheet294 Sheet296 Sheet297 Sheet299 Sheet300 Sheet301