#10 a-d

Koontz Company had the following situations happen during June. Situation A: One of Koontz Company's full-time employees quit. A replacement employee was hired at $16.50 an hour. This employee worked 160 hours during June. Situation B: Power outages occurred three times during the month that caused all production to shut down for 75 hours twice and 1.5 hours the third time. During these times, 4 workers remained an site, but no work was performed. Situation C: An order of raw material was received damaged during shipping. The end of the stack of material (all material in the order) was damaged such that 12% of the order was not usable. Based on the standard, the order was expected to produce 2,000 of the units for the month of June. Situation D: Purchasing was able to negotiate a $2,000 discount for the damaged order from c) above. 10) Consider the four variances for JUNE; Materials Price Variance, Material Quantity Variance, Labor Rate Variance, and Labor Efficiency Variance. a) For Situation A, which of the four variances will be affected by the situation? will it be favorable or unfavorable? Estimate how much of the variance will be impacted by the situation. Hint: Use the formula for the specific variance impacted. Determine the "change the situation will have on each element of the formula (actual and standards) and determine the dollar value of the impact b) For Situation B, which of the four variances will be affected by the situation? Will the variance be favorable or unfavorable? Estimate the impact to the variance. c) For Situation C, which of the four variances will be affected by the situation? Will it be favorable or unfavorable? Estimate the impact to the variance. d) For Situation D, which of the four variances will be affected by the situation? Will it be favorable or unfavorable? Estimate the impact to the variance. Using the information for C and D, do you think purchasing did well with its negotiation of the discount? Explain