Koontz Company manufactures a number of products. The standards relating to one of these products are shown below, along with

actual cost data for May.

The production superintendent was pleased when he saw this report and commented: "This $$0\mathrm{.}87$ excess cost is well within the $5$

percent limit management has set for acceptable variances. It's obvious that there's not much to worry about with this product."

Actual production for the month was $11,500$ units. Variable overhead cost is assigned to products on the basis of direct labor$-$hours.

There were no beginning or ending inventories of materials.

Required:

Compute the following variances for May:

a$.$ Materials price and quantity variances.

b$.$ Labor rate and efficiency variances.

c$.$ Variable overhead rate and efficiency variances.

How much of the $$0\mathrm{.}87$ excess unit cost is traceable to each of the variances computed in requirement $1.$

How much of the $$0\mathrm{.}87$ excess unit cost is traceable to apparent inefficient use of labor time?

Complete this question by entering your answers in the tabs below.

$1$a$.$ Compute the following variances for May, materials price and quantity variances.

$1$b$.$ Compute the following variances for May, labor rate and efficiency variances.

$1$c$.$ Compute the following variances for May, variable overhead rate and efficiency variances. $($Indicate the effect of each

variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Input all amounts

as positive values.$)$Mickley Corporation produces two products, Alpha$6$s and Zeta$7$s$,$ which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials$$X$442$ and Y$661.$ The company uses a standard cost system, with the following standards for each product $($on a per unit basis$)$:

Product Raw Material Standard Labor Time

X$442$ Y$661$ Sintering Finishing

Alpha$62\mathrm{.}5$ kilos $2\mathrm{.}5$ liters $0\mathrm{.}40$ hours $1\mathrm{.}20$ hours

Zeta$74\mathrm{.}5$ kilos $5\mathrm{.}5$ liters $0\mathrm{.}40$ hours $0\mathrm{.}80$ hours

Information relating to materials purchased and materials used in production during May follows:

Material Purchases Purchase Cost Standard Price Used in Production

X$44215,400$ kilos $ $46,200$ $ $2\mathrm{.}80$ per kilo $9,900$ kilos

Y$66116,400$ liters $ $27,880$ $ $1\mathrm{.}80$ per liter $14,400$ liters

The following additional information is available:

The company recognizes price variances when materials are purchased.

The standard labor rate is $$21\mathrm{.}00$ per hour in Sintering and $$20\mathrm{.}00$ per hour in Finishing.

During May, $1,350$ direct labor$-$hours were worked in Sintering at a total labor cost of $$33,210,$ and $2,990$ direct labor$-$hours were worked in Finishing at a total labor cost of $$65,780.$

Production during May was $2,000$ Alpha$6$s and $1,200$ Zeta$7$s$.$

Required:

$1.$ Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor.

$2.$ Compute the materials price and quantity variances for each material.

$3.$ Compute the labor rate and efficiency variances for each operation.