departmental variances This is a eontinuation of Ralph's LP, problem 12 in Chapter 14. Ralph has implemented the production and sale s plan determined in the original problem.

Events did not quite tum out, though. Budgets are based on the LlAs noted in the original problem. Sales and produetion of the first produet totaled ql == 145 units.

The selling priee tumed out to be 610 per unit. (There was no produetion or sale of the seeond produet during the period.) The following aetual eosts were ineurred:

selling and administrative S&A = 5,500;

direet labor in fabrieation DLf = 6,556 (298 hours);

direct labor in assembly DU = 5,180 (140 hours);

direct material (all in fabrieation) DM = 19,285;

overhead in fabrieation Oyf = 11,900;

overhead in assembly OY· = 21,000; and manufacturing service group MS = 9,100.

The direet material eost is based on an average price of 19 per "unit" of direet material. Also, the aeeounting Hbrary uses variable eosting for internal pUlpOseS.

a] Determine (i) net income for the period; (ii) aetual manufaeturing eost; (iii) the standard variable eost of the work accomplished; (iv) the "plug" to eost of goods sold associated with the standard eost system; and (v) all manufacturing eost varianees.

b] Prepare a schedule ofvarianees forthe fabrieation and assembly departments.

Here you must decide how, orwhether, to alloeate the manufacturing serviee group eosts to the fabrieation and assembly departments.

AppendixLO1