Question

In: Accounting

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

Product X442 Y661 Sintering Finishing
    Alpha6 2.0 kilos 1.4 liters 0.50 hours 0.90 hours
    Zeta7 4.0 kilos 3.4 liters 0.10 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 14,600 kilos $62,780 $4.10 per kilo 9,100 kilos
    Y661 15,600 liters $21,840 $1.50 per liter 13,600 liters

  

The following additional information is available:
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is $15.00 per hour in Sintering and $20.00 per hour in Finishing.
c.

During May, 1,300 direct labor-hours were worked in Sintering at a total labor cost of $30,030, and 2,910 direct labor-hours were worked in Finishing at a total labor cost of $64,020.

d. Production during May was 2,100 Alpha6s and 1,300 Zeta7s.

  

Requied:
1.

Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.)

     


2.

Compute the materials price and quantity variances for each material. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

     



3.

Compute the labor rate and efficiency variances for each operation. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

     

Solutions

Expert Solution

Particulars Std Qty Std Price/Rate Standard Cost
Alpha 6:
Direct Materials-X442 2 kilos 4.10 per kilo                        8.20
Direct Materials-Y661 1.4 litres 1.50 per litre                        2.10
Direct Labour-Sintering 0.50 hrs 15 per hr                        7.50
Direct Labour-Finishing 0.90 hrs 20 per hr                      18.00
Total                      35.80
Zeta 7:
Direct Materials-X442 4 kilos 4.10 per kilo                      16.40
Direct Materials-Y661 3.4 litres 1.50 per litre                        5.10
Direct Labour-Sintering 0.10 hrs 15 per hr                        1.50
Direct Labour-Finishing 0.90 hrs 20 per hr                      18.00
Total                      41.00
Material Price & Quantity Variance :-
Direct Materials Variance-X4442:
Material Price Variance 2920 (U)
Material Quantity variance 1230 (F)
Direct Materials Variance-Y661:
Material Price Variance 1560 (F)
Material Quantity variance 9360 (U)
X4442:-
Material Price Variance = (SR – AR) * A Qty purchased
(4.10 – 4.30) * 14,600 = $2920 (U)
AR = 62780/14600 = $4.30
Material Qty Variance = (SQ – AQ used) * SR
(9400 – 9100) * 4.10 = $1,230 (F)
SQ = Alpha = 2 kilo * 2100 = 4200 &
          Zeta = 4 kilo * 1300 = 5200
SQ total = 9,400
AQ used = 9,100
Y661:-
Material Price Variance = (SR – AR) * A Qty purchased
(1.50 – 1.40) * 15600 = $1560 (F)
AR = 21840/15600 = $1.40
Material Qty Variance = (SQ – AQ used) * SR
(7360 - 13600) *1.50 = $9360 (U)
SQ = Alpha = 1.4 Litres*2100 = 2940
          Zeta = 3.4 Litres*1300 = 4420
SQ total = 7360
AQ used = 13600
Labour Rate & Efficiency Variance :-
Direct Labour Variances-Sintering:
Labour Rate Variance 10530 (U)
Labour Efficiency Variance 1800 (U)
Direct Labour Variances-Finishing:
Labour Rate Variance 5820 (U)
Labour Efficiency Variance 3000 (F)
Sintering:-
Labour Rate variance = (SR – AR) * A Hrs
(15 – 23.10) * 1300 = 10,530 (U)
AR = 30030/1300 = 23.10
SR = 15
Labour Efficiency Variance = (S Hrs – A Hrs) * SR
(1180 – 1300) * 15 = $1800 (U)
S Hrs = Alpha = 0.50 hrs * 2100 = 1050
             Zeta = 0.10 * 1300 = 130
      Total Std Hrs = 1180
Finishing:-
Labour Rate variance = (SR – AR) * A Hrs
(20 – 22) * 2910 = 5820 (U)
AR = 64020/2910 = 22
SR = 20
Labour Efficiency Variance = (S Hrs – A Hrs) * SR

Related Solutions

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 Product X442 Y661 Sintering Finishing Alpha6 2.0 kilos 1.5 liters 0.10 hours 1.00 hours Zeta7 3.0 kilos 4.5 liters 0.30 hours 0.80 hours Information relating to materials purchased and materials...
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 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....
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 1.00 hours Zeta7 3.0 kilos 4.5 liters 0.30 hours 0.80 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing Alpha6 3.0 kilos 2.0 liters 0.40 hours 1.00 hours Zeta7 5.0 kilos 5.0 liters 0.50 hours 1.20 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing     Alpha6 3.0 kilos 2.0 liters 0.40 hours 1.00 hours     Zeta7 5.0 kilos 5.0 liters 0.50 hours 1.20 hours    Information relating to materials...
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 Product X442 Y661 Sintering Finishing Alpha6 3.0 kilos 3.0 liters 0.30 hours 1.10 hours Zeta7 5.0 kilos 5.0 liters 0.40 hours 1.20 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing Alpha6 2.5 kilos 2.5 liters 0.40 hours 1.20 hours Zeta7 4.5 kilos 5.5 liters 0.40 hours 0.80 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing Alpha6 2.5 kilos 2.5 liters 0.20 hours 0.90 hours Zeta7 4.5 kilos 3.5 liters 0.30 hours 1.20 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing Alpha6 2.5 kilos 2.5 liters 0.40 hours 0.90 hours Zeta7 4.5 kilos 4.5 liters 0.35 hours 0.80 hours Information relating to materials purchased and materials...
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 Product X442 Y661 Sintering Finishing Alpha6 1.5 kilos 2.5 liters 0.20 hours 0.90 hours Zeta7 3.5 kilos 3.5 liters 0.35 hours 0.80 hours Information relating to materials purchased and materials...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT