Problem 10-16 Multiple Products, Materials, and Processes [LO1, LO2] Monte Rosa

Question

Problem 10-16 Multiple Products, Materials, and Processes [LO1, LO2] Monte Rosa Corporation produces two products, Alpha8s and Zeta9s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X342 and Y561. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Product Alpha8 Zeta9 X342 1.6 kilos 2.5 kilos Y561 2.4 liters 4.2 liters Standard Labor Time Sintering Finishing 0.30 hours 0.80 hours 0.45 hours 0.90 hours Information relating to materials purchased and materials used in production during May follows: Purchase Cost Used in Production 8,800 kilos 14,000 liters Standard Material X342 Y561 Purchases 10,000 kilos S34,000 18,000 liters 21,600 Price $3.2 per kilo $1.3 per liter The following additional information is available: a. The company recognizes price variances when materials are purchased b. The standard labor rate is $16 per hour in Sintering and $15 per hour in Finishing c. During May, 1,500 direct labor-hours were worked in Sintering at a total labor cost of $27,750, and 2,820 direct labor-hours were worked in Finishing at a total labor cost of $47,940 d. Production during May was 1,300 Alpha8s and 1,800 Zeta9s. Requied 1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your intermediate and final answers to 2 decimal places. Omit the "$" sign in your response.) Standard Cost Alpha8 Direct materials-X342 Direct materials-Y561 Direct labor-Sintering Direct labor-Finishing Total Zeta9: Direct materials-X342 Direct materials-Y561 Direct labor-Sintering Direct labor-Finishing Total

Explanation / Answer

Qty/hours used in one unit   A Rate per qty/hours B Standard Cost per unit A*B Alpha8 Direct Material-X342 1.6 $3.20 5.12 Direct Material-Y561 2.4 $1.30 3.12 Direct Labor-Sintering 0.3 $16 4.8 Direct Labour Finishing 0.8 $15 12 Total standard Cost 25.04 Zeta9 Direct Material-X342 2.5 $3.20 8 Direct Material-Y561 4.2 $1.30 5.46 Direct Labor-Sintering 0.45 $16 7.2 Direct Labour Finishing 0.9 $15 13.5 Total standard Cost 34.16 Material X342 (When material are purchased) Direct Material Price Variance=Actual Quantity x Actual Price - Actual Quantity x Standard Price 34000-(10000*3.2) 2000 Unfavourable Material Y561 (When material are purchased) Direct Material Price Variance=Actual Quantity x Actual Price - Actual Quantity x Standard Price 21600-(18000*1.3) -1800 Favourable Sintering Direct Labor Rate Variance: Actual Cost-Standard Cost of Actual Hours 27750-(1500*16) 3750 unfavourable Finishing Direct Labor Rate Variance: Actual Cost-Standard Cost of Actual Hours 47940-(2820*15) 5640 unfavourable Sintering Direct Labor Effciency Variance: Standard Rate(Actual Hours-Standard H0urs) 16*(1500-((1300*.3)+(1800*.45))) 4800 U Finishing Direct Labor Effciency Variance: Standard Rate(Actual Hours-Standard H0urs) 15*(2820-((1300*.8)+(1800*.9))) 2400 U

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