1. Alpha Manufacturing

Scenario: Cost of Goods Sold and Production Analysis

Data: Alpha Manufacturing produces widgets using a standard costing system. For the month of June 2023, the company incurred the following costs:

• Direct Materials: $150,000
• Direct Labor: $100,000
• Manufacturing Overhead: $75,000

The standard cost per unit of widget production includes $20 for materials, $15 for labor, and $10 for overhead. During June, Alpha produced 8,000 widgets but incurred a material cost variance of $5,000 and a labor efficiency variance of $3,000.

Requirements: Analyze Alpha Manufacturing's cost of goods sold for June 2023, considering both actual and standard costs. Discuss the impact of the material cost variance and labor efficiency variance on the company's overall production cost and profitability. Evaluate the effectiveness of using a standard costing system in managing production costs and making operational decisions. Recommend strategies for Alpha Manufacturing to improve cost control and variance management in future production cycles.