i need help with 8 a and b.

8) MAKE A CHOICE !!!!! Do A or B-Do not do both. Review your material variances calculated in 2 above. If your material price variance is FAVORABLE, complete 7A here and SKIP 7B. If your material price variance is UNFAVORABLE SKIP A here and complete 7B below. A. COMPLETE IF MPV is FAVORABLE or ZERO. Complete this requirement if your material price variance in 2 is favorable or zero. Otherwise, skip and move on to 7B. If you complete A here, DO NOT DO B below. Management wants to make a few changes to its operation for the next year. Assume Phoenix Company plans to produce and sell the same number of units they sold last year (connect-actual units). a Management believes the lower priced material has contributed to the unfavorable material quantity variance. The purchasing department wants to know what price per pound of raw material they should pay to fully offset the unfavorable material quantity variance they saw last year. Calculate the price. Hint - Use MPV = (SP- AP)AQ: Set material price variance to favorable (positive) amount equal to the quantity variance calculated in 2c. Use the SP from standard cost card in 1 and actual quantity of raw material and solve for AP, actual price). Management would like to set this as their standard raw material price per input for next year. Include the amount in NEXT YEAR's standard cost card below in the highlighted cell. Make sure you show your calculations for partial credit Note - If your quantity variance is also favorable, please contact your instructor for guidance. b. The production supervisor is implementing some changes to production that are expected to improve the materials quantity variance. With these changes, the supervisor believes that their unfavorable quantity variance would have been only half (50%) what it was. HINT: Use MQV - (SQ-AQSP Set MQV to 50% of the quantity variance from 2c. Use the AQ and SP from 2c and solve for Actual Quantity to achieve the desired variance. This will be total quantity of raw material. Divide this quantity by the number of finished goods units produced/sold to express this as POUNDS PER UNIT (ONE UNIT) of finished goods". Management wants to use this as their new standard for next year. Include this in the standard cost card below for the highlighted square. Make sure you show your calculations for partial credit. Note - If your quantity variance is favorable, please contact your instructor for guidance. Project 5: Page 8 of 11 1) Phoenix Company budget amounts are prepared using standards. Follow the instructions provided in (a) through (c) to complete the Standard Card below. Show 4 decimals for all calculated "aty per unit" and "cost per input" amounts. Phoenix Company Standard Cost Card - Current Year (2019) Qty per Std. Cost per Unit Input Unit (a) Direct materials 4.00 lbs 16.25 65 Direct labor .8264hrs 12.10 10 Variable Overhead .8264 hrs 18.4706T 7 626 Cost per 48+64 This is your Check Point. Text/email your Cost Card for 1 to Teri for early review before continuing with the project requirements. 2) With respect to direct material, calculate the following relating to their operating results for the year. a) Assume Phoenix Company paid an average of $15.00 (actual price, AP) a pound for its raw material during the year. How many pounds of raw material did they use? Hint: Actual direct material expenses (connect income statement) divided by 15. Round to the nearest whole number of pounds. Use this as your actual quantity, AQ, for the calculation of DM variances below. ABANAN 1252000/15= 83467 1 b) Using the standard cost card and the flexible budget, how many pounds should Phoenix Company have used? Round to the nearest whole number of pounds. Use this as standard quantity, SQ, for the calculations of DM variances below. c) Complete the following table to calculate the direct material price and quantity variances. 83467 Direct Material Variances Cost Standard Cost AQ X AP AQ SP so SP CO 15.00 83467 Basa x 16.25 76000 X 16.25 112520007 11235000T 104339 721339 1 T Dil quaranty Project 5: Page 1 of 11 varianced DN Price vanance Direct material price variance Direct material quantity variance Total direct material variance Favorable/Unfavorable 104339 Gatavorable |121339 Un favorable 225678 Unfavorable