Answer
Actual DATA for |
3900 |
units |
|
Quantity (AQ) |
Rate (AR) |
Actual Cost |
|
Direct Material |
9950 |
$ 20.700 |
$ 205,965.00 |
Direct labor |
3900 |
$ 15.00 |
$ 58,500.00 |
Variable Overhead |
3900 |
$ 1.28 |
$ 5,000.00 |
Standard DATA for |
3900 |
units |
|
Quantity (SQ) |
Rate (SR) |
Standard Cost |
|
[A] |
[B] |
[A x B] |
|
Direct Material |
( 2.5 ounce x 3900 units)=9750 ounce |
$ 22.00 |
$ 214,500.00 |
Direct labor |
( 0.9 hours x 3900 units)=3510 hours |
$ 16.00 |
$ 56,160.00 |
Variable Overhead |
( 0.9 hours x 3900 units)=3510 hours |
$ 2.00 |
$ 7,020.00 |
Part A
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
( |
$ 22.00 |
- |
$ 20.70 |
) |
x |
9950 |
12935 |
||||||
Variance |
$ 12,935.00 |
Favourable-F |
||||
Material Quantity Variance |
||||||
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
( |
9750 |
- |
9950 |
) |
x |
$ 22.00 |
-4400 |
||||||
Variance |
$ 4,400.00 |
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 |
( |
$ 16.00 |
- |
$ 15.00 |
) |
x |
3900 |
3900 |
||||||
Variance |
$ 3,900.00 |
Favourable-F |
||||
Labour Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
3510 |
- |
3900 |
) |
x |
$ 16.00 |
-6240 |
||||||
Variance |
$ 6,240.00 |
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 |
( |
$ 2.00 |
- |
$ 1.28 |
) |
x |
3900 |
2800 |
||||||
Variance |
$ 2,800.00 |
Favourable-F |
||||
Variable Overhead Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
3510 |
- |
3900 |
) |
x |
$ 2.00 |
-780 |
||||||
Variance |
$ 780.00 |
Unfavourable-U |
Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called F...
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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.20 ounces 0.50 hours 0.50 hours Standard Price or Rate $25.00 per ounce $15.00 per hour $ 3.00 per hour Standard Cost $55.00 7.50 1.50 $64.00 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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.30 ounces 0.50 hours 0.50 hours Standard Price or Rate $26.00 per ounce $14.00 per hour $ 3.40 per hour Standard Cost $59.80 7.00 1.70 $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 or Rate Cost Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit 2.40 ounces 0.70 hours 0.70 hours 18.00 per ounce $43.20 9.80 s 3.00 per hour 0 14.00 per hour 2.10 $55.10 During November, the...
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: 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 Frice or Hate $30.00 per ounce $14.00 per hour...
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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.40 ounces 0.70 hours 0.70 hours Standard Price or Rate $18.00 per ounce $14.00 per hour $ 3.00 per hour Standar Cost $43.20 9.80 - 2.10 $55.10 During November, the...
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 2.50 ounces Standard Price Standard or Rate $19.00 per ounce Cost $ 47.50 Direct materials $15.00 per hour 4.00 per hour Direct labor 0.70 hours 10.50 0.70 hours Variable manufacturing overhead 2.80 $ 60.80 Total standard cost per unit During November, the...
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: During November, the following activity was recorded related to the production of Fludex: Materials purchased, 13,000 ounces at a cost of $244,400. There was no beginning inventory of materials; however, at the end of the month, 3,300 ounces of material remained in ending inventory. The company...
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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.60 ounces 0.60 hours 0.60 hours Standard Price or Rate $29.00 per ounce $12.00 per hour $ 3.50 per hour Standard Cost $75.40 7.20 2.10 $84.70 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 or Hours 2.20 ounces 0.50 hours 0.50 hours Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Price or Rate $25.00 per ounce $15.00 per hour $ 3.00 per hour Standard Cout $55.00 7.50 1.50 $64.00 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: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or Hours 2.30 ounces 0.80 hours 0.80 hours Standard Price or Rate $24.00 per ounce $15.00 per hour $ 3.50 per hour Standard Cost $55.20 12.00 2.80 $70.00 During November, the following...
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