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Exercise 10-22 Straightforward Computation of Variances (LO 10-1, 10-3) Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12
Exercise 10-22 Straightforward Computation of Variances (LO 10-1, 10-3) Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Actual material purchases amounted to 200,000 kilograms at $0.640 per kilogram. Actual costs incurred in the production of 40.000 units were as follows: Required: Required: 1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance. and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable", Select "None" and enter " Ofor no effect (i.e, zero variance).)
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