Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12...
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Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor: Quantity, 0.11 hour Rate, $5.50 per hour Direct Material: Quantity, 4 kilograms Price, $0.32 per kilogram Actual material purchases amounted to 55,200 kilograms at $0.350 per kilogram. Actual costs incurred in the production of 12,000 units were as follows: Direct labor: Direct material: $9,492 for 1,680 hours $17,430 for 49,800 kilograms Required: 1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance).) Direct-material price variance Direct-material quantity variance Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor: Quantity, 0.11 hour Rate, $5.50 per hour Direct Material: Quantity, 4 kilograms Price, $0.32 per kilogram Actual material purchases amounted to 55,200 kilograms at $0.350 per kilogram. Actual costs incurred in the production of 12,000 units were as follows: Direct labor: Direct material: $9,492 for 1,680 hours $17,430 for 49,800 kilograms Required: 1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance).) Direct-material price variance Direct-material quantity variance Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance
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