Question

In: Accounting

Problem 11-5 The Hayes Chemical Company produces a chemical used in dry cleaning. Its accounting system...

Problem 11-5

The Hayes Chemical Company produces a chemical used in dry cleaning. Its accounting system uses standard costs. The standards per 0.40-gallon can of chemical call for 1.20 gallons of material and 1.50 hours of labor. (1.20 gallons of material are needed to produce a 0.40-gallon can of product due to evaporation.) The standard cost per gallon of material is $6.00. The standard cost per hour for labor is $8.00. Overhead is applied at the rate of $8.03 per can. Expected production is 18,500 cans with fixed overhead per year of $37,555 and variable overhead of $6.00 per unit (a 0.40-gallon can).

During 2018, 24,000 cans were produced; 34,400 gallons of material were purchased at a cost of $232,200; 27,300 gallons of material were used in production. The cost of direct labor incurred in 2018 was $269,265 based on an average actual wage rate of $7.57 per hour. Actual overhead for 2018 was $241,500.

Determine the standard cost per unit. (Round answer to 2 decimal places, e.g. 15.25.)
Standard cost $ per unit

LINK TO TEXT

LINK TO TEXT

Calculate material, labor, and overhead variances. (Round intermediate calculations to 2 decimal places, e.g. 14.37 and final answers to 0 decimal places, e.g. 125. Enter all variances as a positive number.)
Material Price Variance $

UnfavorableFavorableNeither Unfavorable nor Favorable

Material Quantity Variance $

Neither Unfavorable nor FavorableFavorableUnfavorable

Labor Rate Variance $

FavorableUnfavorableNeither Unfavorable nor Favorable

Labor Efficiency Variance $

FavorableUnfavorableNeither Unfavorable nor Favorable

Controllable Overhead Variance $

FavorableUnfavorableNeither Unfavorable nor Favorable

Overhead Volume Variance $

FavorableNeither Unfavorable nor FavorableUnfavorable

Solutions

Expert Solution


Related Solutions

The Hayes Chemical company produces a chemical used in dry cleaning. Its accounting system uses standard...
The Hayes Chemical company produces a chemical used in dry cleaning. Its accounting system uses standard costs. The standard per .5-gallon can of chemical call for 1.20 gallons of material and 1.50 hours of labor. (1.20 gallons of material are needed to produce a .5-gallon can of product due to evaporation.) The standard cost per gallon of material is $6.00. The standard cost per hour for labor $9.00. Overhead is applied at the rate of $7.75 per can. Expected production...
Hayes Chemical Company produces a chemical used in dry cleaning. Its accounting system uses standard costs....
Hayes Chemical Company produces a chemical used in dry cleaning. Its accounting system uses standard costs. Standards for each 0.5-gallon can of chemical and actual data for Hayes Chemical follow: Standards and budgeted information:    Gallons of material per can of chemical 1.20    Hours of labor per can of chemical 1.50    Standard cost per gallon of material $6.00    Standard cost per hour of labor $9.00    Overhead application rate per can $7.75    Expected production - cans...
Acme Dry cleaning has an on-campus location with 5 years to go on its lease. An...
Acme Dry cleaning has an on-campus location with 5 years to go on its lease. An existing dry cleaning machine will last for the 5-year duration of the lease, at which time it will be worn out and worthless. A machine will be more efficient and will allow the company to handle a broader range of fabrics. As a result, the new machine will increase revenues by $1,500 a year and decrease operating costs (other than depreciation) by $600 per...
Carbon tetrachloride, CCl4, was once used as a dry cleaning solvent, but is no longer used...
Carbon tetrachloride, CCl4, was once used as a dry cleaning solvent, but is no longer used because it is carcinogenic. At 57.8 °C, the vapor pressure of CCl4 is 0.530 atm, and its enthalpy of vaporization is 33.05 kJ/mol. Use this information to estimate the normal boiling point for CCl4. please show work
The Watkins Chemical Company produces a chemical compound that is used as a lawn fertilizer. The...
The Watkins Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate of 10,533 pounds per day. Demand for the compound is 0.9 million pounds per year. The fixed cost of setting up for a production run of the chemical is $2,773, and the variable cost of production is $3.23 per pound. The annual holding cost per pound of the chemical amounts to 5% of the value. Assume that...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated: Direct labor: 2 hours at $25.00 per hour $ 50.00 Direct materials: 2 gallons at $10.00 per gallon $ 20.00 During December of the current year, Boron produced a total of 2,500 gallons of output and incurred the following direct manufacturing costs: Direct labor: 4,900 hours worked...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated:   Direct labor: 2.80 hours at $33.00 per hour $92.40   Direct materials: 2.80 gallons at $18.00 per gallon $50.40 During December of the current year, Boron produced a total of 2,580 gallons of output and incurred the following direct manufacturing costs:   Direct labor: 7,100 hours worked @ an...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company...
Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated: Direct labor: 2 hours at $25.00 per hour $ 50.00 Direct materials: 2 gallons at $10.00 per gallon $ 20.00 During December of the current year, Boron produced a total of 2,500 gallons of output and incurred the following direct manufacturing costs: Direct labor: 4,900 hours worked...
The Kohler Chemical Manufacturing Company produces two primary chemical products to be used as base ingredients...
The Kohler Chemical Manufacturing Company produces two primary chemical products to be used as base ingredients for a variety of products. The 2016 budget for the two products (in thousands) was as follows: LX-4 ABC-8 Total Level of production in litres 1,800 1,800 3,600 Direct materials $4,500 $5,625 $10,125 Direct labour 2,700 2,700 5,400 Total direct manufacturing cost $7,200 $8,325 $15,525 The following planning assumptions were used for the budget: (1) a direct materials yield of 96%, and (2) a...
You own a chain of 3 dry-cleaning stores in a medium-size town. A problem in customer...
You own a chain of 3 dry-cleaning stores in a medium-size town. A problem in customer service has surfaced recently. When you spend the day, or even part of the day in a particular store, clerks seem to provide excellent customer service, spotters are making sure all stains are removed from garments, and pressers are doing a good job of pressing difficult items such as silk blouses. Yet during those same visits, customers complain to you about such things as...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT