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 used in production during May follows:
Material | Purchases | Purchase Cost | Standard Price |
Used in Production |
|||
X442 | 14,300 | kilos | $57,200 | $3.80 | per kilo | 8,800 | kilos |
Y661 | 15,300 | liters | $24,480 | $1.70 | per liter | 13,300 | liters |
The following additional information is available:
The standard labor rate is $20.00 per hour in Sintering and $18.50 per hour in Finishing.
During May, 1,300 direct labor-hours were worked in Sintering at a total labor cost of $29,640, and 2,880 direct labor-hours were worked in Finishing at a total labor cost of $59,040.
Production during May was 1,800 Alpha6s and 1,800 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.
1.
Standard Quantity or Hours |
Standard Price or Rate |
Standard Cost | |||
Alpha6: | |||||
Direct materials-X442 | 1.5 | kilos | 3.80 | per kilo | 5.70 |
Direct materials-Y661 | 2.0 | liters | 1.70 | per liter | 3.40 |
Direct labor-Sintering | 0.20 | hours | 20.00 | per hour | 4.00 |
Direct labor-Finishing | 0.80 | hours | 18.50 | per hour | 14.80 |
Total $ | 27.90 | ||||
Zeta7: | |||||
Direct materials-X442 | 3.5 | kilos | 3.80 | per kilo | 13.30 |
Direct materials-Y661 | 4.0 | liters | 1.70 | per liter | 6.80 |
Direct labor-Sintering | 0.40 | hours | 20.00 | per hour | 8.00 |
Direct labor-Finishing | 0.90 | hours | 18.50 | per hour | 16.65 |
Total $ | 44.75 |
2.
Direct Materials Variances-Material X442: | ||
Materials price variance | $ 2,860 | U |
Materials quantity variance | $ 760 | F |
Direct Materials Variances-Material Y661: | ||
Materials price variance | $ 1,530 | F |
Materials quantity variance | $ 4,250 | U |
Working:
X442: Price variance | |||||||
Actual Cost | |||||||
AQ | x | AR | AQ | x | SR | ||
14300 | x | 4.00 | 14300 | x | 3.80 | ||
57200 | 54340 | ||||||
2860 | |||||||
Y661: Price variance | |||||||
Actual Cost | |||||||
AQ | x | AR | AQ | x | SR | ||
15300 | x | 1.60 | 15300 | x | 1.70 | ||
24480 | 26010 | ||||||
-1530 |
X442: Quantity variance | |||||||
Standard Cost | |||||||
AQ | x | SR | SQ | x | SR | ||
8800 | x | 3.80 | 9000 | x | 3.80 | ||
33440 | 34200 | ||||||
-760 | |||||||
SQ = (1800 x 1.5) + (1800 x 3.5) = 2700 + 6300 = 9000 | |||||||
Y661: Quantity variance | |||||||
Standard Cost | |||||||
AQ | x | SR | SQ | x | SR | ||
13300 | x | 1.70 | 10800 | x | 1.70 | ||
22610 | 18360 | ||||||
4250 | |||||||
SQ = (1800 x 2.0) + (1800 x 4.0) = 3600 + 7200 = 10800 |
3.
Direct Labor Variances-Sintering: | ||
Labor rate variance | $ 3,640 | U |
Labor efficiency variance | $ 4,400 | U |
Direct Labor Variances-Finishing: | ||
Labor rate variance | $ 5,760 | U |
Labor efficiency variance | $ 3,330 | F |
Working:
Sintering: | |||||||||||
Actual Cost | Standard Cost | ||||||||||
AH | x | AR | AH | x | SR | SH | x | SR | |||
1300 | x | 22.80 | 1300 | x | 20.00 | 1080 | x | 20.00 | |||
29640 | 26000 | 21600 | |||||||||
3640 | 4400 | ||||||||||
SH = (1800 x 0.20) + (1800 x 0.40) = 360 + 720 = 1080 | |||||||||||
Finishing: | |||||||||||
Actual Cost | Standard Cost | ||||||||||
AH | x | AR | AH | x | SR | SH | x | SR | |||
2880 | x | 20.50 | 2880 | x | 18.50 | 3060 | x | 18.50 | |||
59040 | 53280 | 56610 | |||||||||
5760 | -3330 | ||||||||||
SH = (1800 x 0.80) + (1800 x 0.90) = 1440 + 1620 = 3060 |
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 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 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 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 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...
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 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): Standard Labor Time sintering 0.20 hours Raw Material Product Alpha6 Zeta7 x442 2.0 kilos 4.0 kilos Y661 3.4 1iters Finishing 0.80 hours 5.0 liters 0.25 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): 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...
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...