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5. Direct labor variances - Find the missing information: Case A Case B Case C Units...

5. Direct labor variances - Find the missing information:

	Case A	Case B	Case C
Units Produced	800	240	1,500
Standard hours per unit	3	? (d)	? (g)
Standard hours (SQA)	? (a)	480	? (h)
Standard rate per hour	$7.00	$9.50	$6.00
Actual hours worked	2,330	? (e)	4,000
Actual total labor cost	? (b)	$4,560	$26,812.50
Labor rate (price) variance	$466 F	$288 U	? (i)
Labor efficiency (usage) variance	? (c)	(f)	$2,250 U

Letter	Your answer	Letter	Your answer
A		F
B		G
C		H
D		I
E

6. Chuck makes Supersized Chucky-Puffs. Chuck determined the standards for each unit (bag) of Chucky-Puff produced requires 1.5 gallons of ingredients (direct materials) and 0.75 direct labor hours. Chuck expects to pay $2 per gallon of ingredients and his employees a rate of $10 per hour. Based on the company’s forecasts, Chuck is expecting to sell 15,000 units (bags) during the year. At the end of year, Chuck actually sold 16,000 units (bags) and used 20,000 gallons of ingredients and paid $1.9 per gallon. Further, Human resources informed Chuck that he incurred $80,000 in direct labor costs from 10,000 direct labor hours (assume no overtime is used).

a. What is the material price variance?

b. What is the material quantity variance?

c.What is the labor rate variance?

d. What is the labor usage variance?

7. Responsibility Accounting:

a. What is a cost center? Give an example of a cost center ____________________________________________________________________________________________________________________________________________________________

b. What is a Profit center? Give an example of a profit center ____________________________________________________________________________________________________________________________________________________________

c. What is an investment center? Give an example of an investment center ____________________________________________________________________________________________________________________________________________________________

d. What is management by exception: __________________________________________________________________________________________________________________________________________________________________________

e. The Mega Division of Green Corporation is an investment center. It has $1,000,000 of operating assets. During 2018, the Mega Division earned operating income of $300,000 on $6,000,000 of sales. Green’s companywide return on investment or desired rate of return is approximately 10% SHOW WORK FOR CREDIT!

What is the ROI?______________________

What is the margin? ____________________

What is the turnover? _____________________

What is the residual income? _______________

Expert Solution

Question 5. Direct labor variances - Find the missing information:

ekkarill92 answered 2 months ago

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