Need help in the section that has been boxed in red. And please review my other answers for accuracy and correctness.
K Parts 1 & 2 The executive team at Current Designs has gathered to evaluate the company's operations B E G H for the last month. One of the topics on the agenda is the special order from Huegel Hollow, which was presented in the Current Designs problem in chapter 2. Recall that Current 1 Chapter 11: Using Excel to Make Decisions at Current Designs Designs had a special order to produce a batch of 20 kayaks for a client, and you were asked 2 to determine the cost of the order and the cost per kayak Mike Cichanowski asked the others in the special order caused any particular 3 Data problems in the production process. Dave Thil, the production manager, made the following 4 Actual activity for Huegel Hollow order: comments: Since we wanted to complete this order quickly and make a good first impression 5 on this new customer, we had some of our most experienced type I workers run the rotomold Purchases of polyethylene powder 1,200 pounds oven and do the trimming. They were very efficient and were able to complete that part of the 6 Finishing kits assembled 20 kits manufacturing process even more quickly than the regular crew. However, the finishing on Type I labor hours 38 hours these kayaks required a different technique than what we usually use, so our type II workers 8 took a little longer than usual for that part of the process." 65 hours Type Il labor hours Deb Welch, who is in charge of the purchasing function, said, 'We had to pay a little 9 Cost of polyethylene purchases $2,040 more for the polyethylene powder for this order because the customer wanted a color that we 10 Cost of assembling finishing kits $3,240 don't usually stock. We also ordered a little extra since we wanted to make sure that we had 11 $570 enough to allow us to calibrate the equipment. The calibration was a little tricky, and we used Total type I labor cost all of the powder that we had purchased. Since the number of kayaks in the order was fairly 12 Total type II labor cost $796 25 small, we were able to use some rope and other parts that were left over from last year's 13 Number of units produced production in the finishing kits. We've seen a price increase for these components in the last 20 kayaks year, so using the parts that we already had in inventory cut our costs for the finishing kits. 14 Required 15 Standards for each kayak: Use sheet tab Part 1. 16 Pounds of polyethylene powder 54 pounds 1 (a) Based on the comments presented in the problem, predict whether each of the 17 Finishing kits 1 each following variances will be favorable or unfavorable. If you don't have enough 18 Type I labor hours 2 hours information to make a prediction, use "NEI to indicate "Not Enough Information." 19 Type Il labor hours 3 hours (1) Quantity variance for polyethylene powder (2) Price variance for polyethylene powder 20 Cost of polyethylene power $1.50 per pound (3) Quantity variance for finishing kits 21 Cost of finishing kits $170.00 per kit (4) Price variance for finishing kits 22 (5) Quantity variance for type I workers Type I labor rate $1500 per hour (6) Price variance for type I workers 23 Type Il labor rato $12.00 per hour (7) Quantity variance for type II workers 24 (8) Price variance for type il workers 25 (b) Diane Buswell examined some of the accounting records and reported that Current Designs purchased 1,200 pounds of polyethylene powder for this order at a total cost of $2,040. Twenty (20) finishing kits were assembled at a total cost of $3,240. The 27 Required total cost of $570. The type Il finishing employees worked 65 hours at a total cost of 28 Follow the stop by-step directions to perform varianco analysis for Current Designs. $796.25. A total of 20 kayaks were produced for this order. The standards that had 29 been developed for this model of kayak are reproduced here. For each kayak 54 pounds of polyethylene powder at $1.50 per pound . 1 finishing kit (rope, seat, hardware, etc.) at $170 2 hours of type I labor from people who run the oven and trim the plastic at 30 Part 1 NEI standard wage rate of $15 per hour (a) Quantity variance for polyethylene powder 3 hours of type Il labor from people who attach the hatches and seat and other 32 Price variance for polyethylene powder hardware at a standard wage rate of $12 per hour 33 Calculate the eight variances that are isted in part (a) of this problem. Quantity variance for finishing kits 34 Price variance for finishing kits WHAT IF? 35 2. Perform what-if analysis to answer the following: Quantity variance for type I workers Suppose the number of kayaks ordered by Huegel Hollow was 21 instead of 20. Identity 36 Price variance for type I workers which variances made no change in dollar amounts from the original kayaks produced 37 Quantity variance for type II workers Explain why these variances remained the same. 38 Price variance for type Il workers 39 - $ 180 Favorable $ 240 Favorable SQ SP $ No Variance S (160) Unfavorable 41 (0) Quantity variance for polyethylene powder 42 AQ SP SQ * SP 43 $ 1,800 $ 1,620 44 45 Price variance for polyethylene powder 46 AQ x AP AQ SP 47 S 2,040 $ 1,800 48 49 Quantity variance for finishing kits 50 AQ * SP 51 $ 3,400 $ 3,400 52 53 Price variance for finishing kits 54 AQ X AP AQ SP 55 S 3,240 - $ 3,400 56 57 Quantity variance for typo I workers 58 AHSR SH SR 59 S 570 $ 600 60 61 Price variance for type I workers 62 AH AR AH SR 63 S 570 - $ 570 64 65 Quantity variance for type II workers 66 AH SR SH X SR 67 $ 780 $ 720 68 69 Price variance for type II workers 70 AH X AR AH SR 71 $ 796.25 $ 780 72 13 $ (30) Unfavorable $ No Variance $ 60 Favorable S 16 Favorable
