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Bulletproof Boyscouts Co . is a company that manufactures protective equipment related to sports. Jungkook, the newly assigned general manager, would like to know whether
Bulletproof Boyscouts Co is a company that manufactures protective equipment related to sports. Jungkook, the newly assigned general manager, would like to know whether the company is doing well or not. He talked with the previous manager, Seokjin, who reassured him that "the company was doing just fine" and that "the cost is all under control". To verify whether this was true or not, he is determined to review the company's income statement and the relevant information provided within.
Bulletproof Boyscouts Co Operates under a standard costing system. Each completed unit of protective equipment requires of direct materials at $ per kilogram and direct labor hours with the rate of $ per hour.
During Bulletproof Boyscouts Co produced and incurred the following costs:
a Purchased kilograms of materials at a cost of $ per kilogram.
b Used kilograms of materials in production. Finished goods and work in process inventories are insignificant and can be ignored.
c The factory workers worked direct labor hours at $ per hour.
Required:
Compute the direct material price and usage variances for
Compute the direct labor price and usage variances for
Verify whether the previous manager was telling the truth or not: is the company really doing well and the cost is kept under control? Hint: Summarize the variances that you computed above by showing the net overall favorable or unfavorable flexiblebudget variance for the month
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