Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen
Question:
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: Direct material:
Quantity, .25 hour Quantity, 4 kilograms Rate, $16 per hour Price, $.80 per kilogram Actual material purchases amounted to 240,000 kilograms at $.81 per kilogram. Actual costs incurred in the production of 50,000 units were as follows:
Direct labor: $211,900 for 13,000 hours Direct material: $170,100 for 210,000 kilograms Required:
1. Use the variance formulas to compute the direct-material price and quantity variances, the directmaterial purchase price variance, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: the standard direct-labor rate is $15 per hour, and the standard direct-material price is $.79 per kilogram.
Step by Step Answer:
Managerial Accounting Creating Value In A Dynamic Business Environment
ISBN: 9781259569562
11th Edition
Authors: Ronald W.Helton, David E. Platt