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Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materialsX442 and

Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materialsX442 and Y661. 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
X442 Y661 Sintering Finishing
Alpha6 2.0 kilos 1.5 liters 0.10 hours 1.00 hours
Zeta7 3.0 kilos 4.5 liters 0.30 hours 0.80 hours

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

Material Purchases Purchase Cost Standard Price Used in Production
X442 14,200 kilos $ 55,380 $ 3.70 per kilo 8,700 kilos
Y661 15,200 liters $ 22,800 $ 1.60 per liter 13,200 liters

The following additional information is available:

  1. The company recognizes price variances when materials are purchased.

The standard labor rate is $22.00 per hour in Sintering and $18.10 per hour in Finishing.

During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,240, and 2,870 direct labor-hours were worked in Finishing at a total labor cost of $60,270.

Production during May was 1,700 Alpha6s and 1,800 Zeta7s.

Compute the labor rate and efficiency variances for each operation.

Direct Labor Variances finishing

Laboe Rate Variance?

Labor efficiency variance?

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