Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass throug
ID: 2589451 • Letter: M
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): 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 used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 14,200 kilos $55,380 $3.70 per kilo 8,700 kilos Y661 15,200 liters $22,800 $1.60 per liter 13,200 liters 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 $18.10 per hour in Finishing. During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,240, and 2,870 direct labor-hours were worked in Finishing at a total labor cost of $60,270. Production during May was 1,700 Alpha6s and 1,800 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).)
rev: 06_13_2016_QC_CS-53459, 06_30_2016_QC_CS-54927, 07_01_2016_QC_CS-54927 ReferenceseBook & Resources WorksheetLearning Objective: 11-01 Compute the direct materials price and quantity variances and explain their significance. Difficulty: 2 MediumLearning Objective: 11-02 Compute the direct labor rate and efficiency variances and explain their significance. Check my work
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 used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 14,200 kilos $55,380 $3.70 per kilo 8,700 kilos Y661 15,200 liters $22,800 $1.60 per liter 13,200 liters 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 $18.10 per hour in Finishing. During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,240, and 2,870 direct labor-hours were worked in Finishing at a total labor cost of $60,270. Production during May was 1,700 Alpha6s and 1,800 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).)
rev: 06_13_2016_QC_CS-53459, 06_30_2016_QC_CS-54927, 07_01_2016_QC_CS-54927 ReferenceseBook & Resources WorksheetLearning Objective: 11-01 Compute the direct materials price and quantity variances and explain their significance. Difficulty: 2 MediumLearning Objective: 11-02 Compute the direct labor rate and efficiency variances and explain their significance. Check my work
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 used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 14,200 kilos $55,380 $3.70 per kilo 8,700 kilos Y661 15,200 liters $22,800 $1.60 per liter 13,200 liters 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 $18.10 per hour in Finishing. During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,240, and 2,870 direct labor-hours were worked in Finishing at a total labor cost of $60,270. Production during May was 1,700 Alpha6s and 1,800 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).)
rev: 06_13_2016_QC_CS-53459, 06_30_2016_QC_CS-54927, 07_01_2016_QC_CS-54927 ReferenceseBook & Resources WorksheetLearning Objective: 11-01 Compute the direct materials price and quantity variances and explain their significance. Difficulty: 2 MediumLearning Objective: 11-02 Compute the direct labor rate and efficiency variances and explain their significance. Check my work
Explanation / Answer
1) Standard Quantity or Hours Standard Price or Rate Standard Cost Alpha6 Direct materials—X442 2 kilos $3.70 per $7.40 Direct materials—Y661 1.5 liters $1.60 per litre $2.40 Direct labor—Sintering 0.1 hours $22.00 per hour $2.20 Direct labor—Finishing 1 hours $18.10 per hour $18.10 Total $30.10 Zeta7 Direct materials—X442 3 kilos $3.70 per $11.10 Direct materials—Y661 4.5 liters $1.60 per litre $7.20 Direct labor—Sintering 0.3 hours $22.00 per hour $6.60 Direct labor—Finishing 0.8 hours $18.10 per hour $14.48 Total $39.38 2) Direct Materials Variances—Material X442 SP $3.70 AQ 8700 units SQ Production of Alpha6 (2 kilos per unit × 1,700 units) 3400 Production of Zeta7 (3 kilos per unit × 1,800 units) 5400 SQ 8800 Materials quantity variance = SP (AQ – SQ) Materials quantity variance = $3.70 x (8700 - 8800) $370.00 F Materials price variance = AQ (AP – SP) AP = 55380/14200 $3.90 Materials price variance = 8700 x ($3.90 - $3.70) $1,740.00 U Direct Materials Variances—Material Y661 SP $1.60 per litre AQ 13200 litre SQ Production of Alpha6 (1.5 per lit × 1,700 units) 2550 Production of Zeta7 (4.5 per lit× 1,800 units) 8100 SQ 10650 litre Materials quantity variance = SP (AQ – SQ) Materials quantity variance = $1.60 x (13200 - 10650) $4,080.00 U Materials price variance = AQ (AP – SP) AP = 22800/15200 $1.50 Materials price variance = 13200 x ($1.50 - $1.60) $1,320.00 F
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