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 $22.00 per hour in Sintering and $20.50 per hour in Finishing.

During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,840, and 2,920 direct labor-hours were worked in Finishing at a total labor cost of $65,700.

Production during May was 2,200 Alpha6s and 1,700 Zeta7s.

Required:

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

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

Req 1

Req 2

Req 3

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

Req 1

Req 2

Req 3

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

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

Explanation / Answer

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Summary of Data for Variance Calculation Budgeted Standard for Actual Output Actual Unit Rate Total Unit Rate Total Unit Rate Total Material- X442- Purchase                                 5                         4.20                       21.00       14,700           4.20          61,740          14,700               4.40          64,680 Material- Y661- Purchase                               6                         1.60                         9.60       15,700           1.60          25,120          15,700               1.50          23,550 Labour-Sintering                         0.55                       22.00                       12.10          1,210         22.00          26,620            1,200             23.20          27,840 Labour- Finishing                         1.70                       20.50                       34.85          2,890         20.50          59,245            2,920             22.50          65,700 Material- X442- Quantity          9,250           4.20          38,850            9,200               4.40          40,480 Material- Y661- Quantity       11,450           1.60          18,320          13,700               1.50          20,550

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