Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis):

Raw Material

Standard Labor Time

Product 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:

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.

Requied:

1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.)

2. Compute the materials price and quantity variances for each material. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

3. Compute the labor rate and efficiency variances for each operation. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

rev: 06_13_2016_QC_CS-53459, 06_30_2016_QC_CS-54927, 07_01_2016_QC_CS-54927

ReferenceseBook & Resources

WorksheetLearning Objective: 11-01 Compute the direct materials price and quantity variances and explain their significance.

Difficulty: 2 MediumLearning Objective: 11-02 Compute the direct labor rate and efficiency variances and explain their significance.

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