Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass throug

Question

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):

Information relating to materials purchased and materials used in production during May follows:

The following additional information is available:

The company recognizes price variances when materials are purchased.

The standard labor rate is $23.00 per hour in Sintering and $19.50 per hour in Finishing.

During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $29,000, and 2,940 direct labor-hours were worked in Finishing at a total labor cost of $63,210.

Production during May was 1,500 Alpha6s and 1,000 Zeta7s.

Required:

1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor.

2. Compute the materials price and quantity variances for each material.

3. Compute the labor rate and efficiency variances for each operation.

Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 3.0 kilos 2.0 liters 0.30 hours 1.20 hours Zeta7 5.0 kilos 4.0 liters 0.40 hours 1.20 hours

Explanation / Answer

If any doubt please comment

Ans 1 Standard Quantity or Hours Standard Price or rate Standard cost Alpha6 Direct Material-X442 3 kilos $2.30 per kilo $6.90 Direct Material-Y661 2 litres 1.3 per litre $2.60 Direct Labor-Sintering 0.3 hours 23 per hour $6.90 Direct Labor-Finishing 1.2 hours 19.5 per hour $23.40 Total $39.80 Zeta7 Direct Material-X442 5 Kilos $2.30 per kilo $11.50 Direct Material-Y661 4 litres 1.3 per litre $5.20 Direct Labor-Sintering 0.4 hours 23 per hour $9.20 Direct Labor-Finishing 1.2 hours 19.5 per hour $23.40 Total $49.30 ans 2 Material Price Variance (AQ*AP)-(AQ purchased*standard rate) Material X442 37250-(14900*2.3) 2980 U Material Y661 1590 F 19080-(15900*1.3) -1590 Material Quantity varaince SP*(AQ used-SQ allowed) Material X442 230 F 2.3*(9400-((1500*3)+(1000*5)) -230 Material Y661 8970 U 1.3*(13900-((1500*2)+(1000*4))) ans 3 Labor rate variance Actual cost-(AH*SH) Sintering 250 U 29000-(1250*23) Finishing 5880 U 63210-(2940*19.5) Labor efficiency variance SR*(AH-SH allowed) Sintering 9200 U 23*(1250-((1500*.3)+(1000*.4))) Finishing 1170 F 19.5*(2940-((1500*1.2)+(1000*1.2))) -1170

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