Question
1. Frog Machinery, Inc is experimenting with a new labor mix for this month (March, 2015). The companys standard cost per unit information is as
1. Frog Machinery, Inc is experimenting with a new labor mix for this month (March, 2015). The companys standard cost per unit information is as follows: Standard Quantity Standard Rate Direct Materials 2.5 ounces $20.00 per ounce Direct labor 1.8 Hours $25.00 per hour Variable MF.OH 1.8 Hours $ 3.00 per hour In March, the company employs 100 assembly workers to work on production of Machine Yellow Frog. They worked and average 190 hours per person at an average rate of $22 per hour. In the past (Feb and before), the 100 assembly worker labor mix consist of 50 senior workers and 50 junior workers. In this month, the company is experimenting with a new labor mix, changing it to fewer senior workers and more junior workers. At the end of this month, 9,000 machine Yellow frog are produced.
5. Frog Machinery, Inc is experimenting with a new labor mix for this month (March, 2015). The company's standard cost per unit information is as follows Standard Quantity Direct Materials Direct labor Variable MEOH .5 ounces 1.8 Hours 1.8 Hours Standard Rate S20.00 per ounce S25.00 per hour S 3.00 per hour In March, the company employs 100 assembly workers to work on production of Machine Yellow Frog. They worked and average 190 hours per person at an average rate of $22 per hour In the past (Feb and before), the 100 assembly worker labor mix consist of 50 senior workers and 50 junior workers. In this month, the company is experimenting with a new labor mix, changing it to fewer senior workers and more junior workers. At the end of this month, 9,000 machine Yellow frog are produced. What is labor spending variance and labor efficiency variance for Frog Machinery in March? Spending Variance Labor Efficiency Variance 70,000 Unfavorable 13,000 Favorable 70,000 Unfavorable 13,000 Unfavorable 57,000 Favorable A. 13,000 Unfavorable 57,000 Favorable 57,000 Favorable 70,000 Unfavorable 70,000 Unfavorable C.S 6. Would you recommend Frog Machinery to continue the charge or not? A. Yes, the new labor mix has lower rate and higher working efficiency B. No, the new labor mix has higher rate and higher working efficiency, but cost savings associated with greater C. Yes, the new labor mix has lower rate and lower working efficiency, but cost savings attached to low rates exceeds D. No, the new labor mix has higher rate and lower working efficiency. No cost savings can be generated from using E. No, the new mix has lower rate and lower working efficiency, but the cost savings associated with lower rate cannot efficiency cannot be offset by rate increase cost increments associated with greater efficiency new labor mix be offset by the lower efficiencyStep by Step Solution
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