Compute the price and efficiency variances for the three categories of direct materials and for direct manufacturing labor in July2017.
Begin by calculating the the price and efficiency variances for the each category of direct materials.
Samual Scientific manufactures GPS devices for a chain of retail stores. (Click the icon to view information about the Magellan XS.) The budgeted and actual amounts for Magellan XS for July 2017 were as follows: (Click the icon to view the budgeted and actual amounts.) (Click the icon to view additional Information.) Read the requirements. Requirement 1. Compute the price and efficiency variances for the three categories of direct materials and for direct manufacturing labor in July 2017 Begin by calculating the the price and efficiency variances for the cach category of direct materials. (Do not round intermediary calculations. Round the amount you enter into the input cell to the nearest whole dollar. Label each variance as favorable (F) or unfavorable (U). For varlances with a $0 balance, make sure to enter "o" in the appropriate field. If the variance is zero, do not select a label. Abbreviation used: Qty = quantity.) Price Actual Input Qty x Efficiency Flexible Costs incurred Variance Budgeted Price Variance Budget - X July 2017 Data table Navigation systems Actual Actual Amounts - X Requirements Budgeted Amounts 3.500 4,200 S 68,670 $ 74,070 4,115 1. 3,815 S S 39,375 $ 35.520 2. Magellan XS units produced Navigation systems cost Navigation systems Polarized glass cost Sheets of polarized glass used Plastic casing cost Ounces of specialty plastic used Direct manufacturing labor costs Direct manufacturing labor-hours 875 888 S 11,235 $ 11,069 3. 3 Compute the price and efficiency variances for the three categories of direct materials and for direct manufacturing labor in July 2017. Describe the types of actions the employees at the Savannah plant may have taken to reduce the accuracy of the standards set by the outside consultant. Why would employees take those actions? Is this behavior ethical? If Wilson does nothing about the standard costs, will his behavior violate any of the standards of ethical conduct for practitioners described in the IMA Statement of Ethical Professional Practice? What actions should Wilson take? Wilson can obtain benchmarking information about the estimated costs of Samual's competitors such as Garmin and Tom Tom from the Competitive Intelligence Institute (CIT). Discuss the pros and cons of using the CII information to compute the variances in requirement 1. 4,025 3,745 S S 44,800 2,800 $ 46,046 2.860 4. 5
