(Standard costing) MaMo Corp. specializes in making robotic conveyor sys tems to move materials within a factory....
Question:
(Standard costing) MaMo Corp. specializes in making robotic conveyor sys¬ tems to move materials within a factory. Model #89 accounts for approxi¬ mately 60 percent of the company’s annual sales. Because the company has produced and expects to continue to produce a significant quantity of this model, MaMo uses the following standard costs to account for Model #89 production costs.
a. Compute a separate variance between actual and standard cost for direct material, direct labor, and manufacturing overhead for the Model #89 units produced in 2006.
b. Is the direct material variance found in part
(a) driven primarily by the price per pound difference between standard and actual or the quantity difference between standard and actual? Explain.
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9780324235012
6th Edition
Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn