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MacGyver Corporation manufatures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in six -
MacGyver Corporation manufatures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in sixgallon drums. Two raw materials are used; these are refered to by people in the business as A and B Two types of labor are required also. These are mixers labor class I and packers labor class II You were recently hired by the company president to be the controller. You soon learned that MacGyver uses a standardcosting system. Variances are computed and closed into Cost of Goods Sold monthly After your first month on the job, you gathered the necessary data to compute the month's variances for direct material and direct labor. You finished everything up by : pm on the st including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presentation. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way.
You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it though, you knocked over the Miracle Goo as you rose from the kitchen table. The stuff splattered everywhere, and, most unfortunately, ruined most of your notes. All that remained legible is the following information.
tableDirect Material A: Quantity Variance,Direct Material B; PurchasePrice VarianceDirect Labor I:,Rate Variance,Direct Labor II:Efficency VarianciCost of Good Sold,Accounts,Payabletable Beg. bal. End.bal.
Other assorted data gleaned from your notes:
The standards for each drum of Miracle Goo include pounds of material at a standard price of $ per pound.
The standard cost of material B is $ for each drum of Miracle Goo.
Purchases of material A were pounds at $ per pound.
Given the actual output for the month, the standard allowed quantity of material A was pounds. The standard allowed quantity of material B was gallons.
Although gallons of were purchased, only gallons were used.
The standard wage rate for mixers is $ per hour. The standard labor cost per drum of product for mixers is $ per drum.
The standards allow hours of direct labor II packers per drum of Miracle Goo. The standard labor cost per drum of product for packers is $ per drum.
Packers were paid $ per hour during the month.
There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to directmaterial purchases only. Somehow we must reconstruct all the missing data.
REQUIRED: compute the following
case part Actual Output in drums
Case part Compute the following amounts related to direct materials at MacGyver for the month.Indicate the effect of each variance by selecting "favorable" or "unfavorable." Select "none" and enter for no effect. Round "standard price" "standard cost per drum" and Actual. price" to decimal places.DIRECT MATERIALAB
tablea standard quantity per drum,,lbgalb standard price,perlb,,per galc standard cost per drum,,,d standard quantity allowed, given actual output,lbgal,c actual quantity purchased,lbgal,f actual price,per lbper gal,g actual quantity used,lbgal,h purchase price variance,,,i quantity variance,,,
case part Compute the follwoing amounts related to direct labor at MacGyer for the month. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable." Select "nonc" and enter for no effect. Round "Standard Rate per hour" "Standard cost per drum" and "Actual rate per hour" to decimal places.
tableDIRECT LABOR,Mlixers I,Packers ITa standard hours per drum,,,hours,b standard rate per hour,,,,c standard cost per drum,,,,d standard quantity allowed, given actual output,,hours,,hourse actual rate per hour,,,,f actual hours,,hours,,hoursg rate variance,,,,h efficiency variances,,,,
case part Determine the total variance for the month. Indicate the effect of the variance total by
sclecting "Favorable" or "Unfavorable." Select "non" and enter for no effect.
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