Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Asahi USA, Inc., based in Denver, Colorado, is a subsidiary of a Japanese company manufacturing specialty tools. Asahi USA employs a standard cost system. Following

Asahi USA, Inc., based in Denver, Colorado, is a subsidiary of a Japanese company manufacturing specialty tools. Asahi USA employs a standard cost system. Following are the standards per unit of one of its products, tool KJ79. This tool requires a special chrome steel as a direct material. Standard Quantity Standard Price Standard Cost Direct materials 8 pounds $18 per pound $144 Direct Labor 2.5 hours $20 per hour $50 Total $194 During November, Asahi USA started and completed job KJX86 to manufacture 1,900 units of tool KJ79. It purchased and used 14,250 pounds of the special chrome steel for tool KJ79 at a total cost of $270,750. The total direct labor charged to job KJX86 was $87,500. Job KJX86 required 5,000 direct labor hours.

a. For job KJX86, compute the following and indicate whether the variances are favorable or unfavorable:

1. Direct material price variance

2. Direct material quantity variance

3. Direct labor rate variance

4. Direct labor efficiency variance

b. Provide a plausible explanation for the variances.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing

Authors: Allan Millichamp, John Taylor

9th Edition

1844809404, 978-1844809400

More Books

Students also viewed these Accounting questions

Question

=+What about cheating on exams?

Answered: 1 week ago