Question

Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income?

A.40

B.120

C.20

D.60

Rene is working with the operations manager to determine what the standard labor cost is for a spice chest. He has watched the process from start to finish and taken detailed notes on what each employee does. The first employee selects and mills the wood, so it is smooth on all four sides. This takes the employee 1 hour for each chest. The next employee takes the wood and cuts it to the proper size. This takes 30 minutes. The next employee assembles and sands the chest. Assembly takes 2 hours. The chest then goes to the finishing department. It takes 1.5 hours to finish the chest. All employees are cross-trained so they are all paid the same amount per hour, $14.30.

A. What are the standard hours per chest?

Standard hour per chest  hours

B. What is the standard cost per chest for labor? Round your answer to two decimal places.

Standard cost per chest $

Sitka Industries uses a cost system that carries direct materials inventory at a standard cost. The controller has established these standards for one ladder (unit):

	Standard Quantity	x	Standard Price	=	Standard Cost
Direct materials	3 pounds		$4.40 per pound		$13.20
Direct labor	2.00 hours		12.00 per hour		24.00
Total cost					$37.20

Sitka Industries made 3,000 ladders in July and used 8,800 pounds of material to make these units. Sitka Industries bought 15,600 pounds of material in the current period. There was a $200 unfavorable direct materials price variance.

Enter all amounts as positive numbers.

A. How much in total did Sitka pay for the 15,600 pounds?

Amount paid $

B. What is the direct materials quantity variance?

Direct materials quantity variance $  

C. What is the total direct materials cost variance?

Total direct materials cost variance $  

D. What if 9,500 pounds were used to make these ladders, what would be the direct materials quantity variance?

Direct materials quantity variance $  

E. If there was a $350 favorable direct materials price variance, how much did Sitka pay for the 15,600 pounds of material?

Amount paid $

Answer 1

Part A Company want Profit a $5000 Hand Gestie $1OUDO Contribution Rangin Pay Unit - $250 No. of unit to sall to earn Profit = 5000 floor 250 - Go unit [ Anso Part B- Standard Howe Pay Chest a First Empoyce = 1 hour Second Employce = 0.30 in 30 minutes 3nd Employce = 2 hour Total Employee howe = 2 3 3 hour 30 minuts Finishing Time = 1.50 have Total Std Howe Pau chest 5 hour

Sto hour Past Pesta 5 hour sto have Pure Std Labour Lower Par best = 3.50 hour B- Std Labour Cost Per Chesta 8.50 x $14.80 = $50.05 std Cost Per Chest = 5x$14.20 (if we assume Finished Department = $71.50 Cost Pay hour $14.30 j Part C- Price variance = (Actual Price - Std Price & Actual Quantity doo (A) = (Actual Price - 4:40) x8800 = 8800 Actual Price - 38720 38920 = 8800 Actual Price Actual Price e 38920 ) $4.423 8800 A- Sitta dy for post 15600 Panels= 15000x $6.482 < 68998.80 or $69000

B- Direct Materia) Quantity Valionce + - Cachial Quantity - Std Quantity) x8td Price =( 8800 - 9ovo) x 440 4.40 o Cravanable) 200 Favourable 800 Favourable :- I D C- Direct matorial Cost variance- CA&-Std ady)Asted ast ( 8800 good **4 v CSQX SP) - LAQ XAP) -C Shelbo govo x 4.40) -( 8800 x4.423) 39600 – 30 922.40 $ 677.60 Cfavourable ? 4 9500 un't used - Direct Material Qty Variance - (9500 - 9000) 4. 40 =$ Doom Unfavourable. if 350 Favourable Direct material Price - -350 = CAP-440) X 8800 -350 = 8800 AP- 38720 AP=$4.36 Ant paid for 15000 Round a 4:30 15600-ta - . 413. 6x15600 = $68016 Am