Please answer the following questions based on the given information.

1) The company wants to update their standards used in budgeting and accounting process to reflect certain changes they are expecting.

a) Material price: Management is working with their materials supplier to negotiate a new price/cost of their direct material. Perry Company is looking for a price that would "half" the price variance they saw in May. What price per foot will management want to negotiate? Hint - Use MPV = (SP-AP)AQ; Set material price variance to 50% of May's variance (either in $s or per unit) and solve for Actual Price. This will be the new material price standard for June. Show your work here and include your answers in the table below including the highlighted square. Remember to express your answer in terms of "per foot" price.

b) The production supervisor is implementing some changes to production that are expected to improve the materials quantity variance. With these changes, the supervisor believes May's favorable quantity variance would have been doubled. Using MQV = (SQ-AQ)SP; Solve for Actual Quantity that would have doubled May's materials quantity variance. Remember to express your answers in terms of "per unit". This will be the new quantity standard for June. Include this in the table below for the highlighted square.

c) The company has been providing additional training for their employees and various changes to the production process such that they expect labor efficiency to improve. The company believes June's production can meet the current labor standard (unchanged from May's hour per unit). What will the standard hour per unit be for June? Include in the highlighted square below.

d) The company has increased the wages of its employees by 5% to attempt to provide an incentive and improve moral of the employees. This 5% increase is to the "Actual" labor rate paid in May. This will be the new standard labor rate for June. Calculate the new standard per hour and include it in the highlighted square below.

e) Variable overhead will be applied based on standard hours for June just as it was in May. Include the standard in the highlighted square below. The overhead budget prepared by accounting indicates the rate will be $0.20 per hour lower than last period's actual variable overhead. What is the new standard variable overhead rate? Include the rate in the highlighted square below.

f) Calculate the standard cost per unit for materials, labor and variable overhead.

Problem 8-20B Basic Variance Analysis; the Impact of Variances on Unit Costs [LO8-4, LO8-5, LO8-6] Perry Company manufactures a number of products. The standards relating to one of these products are shown below, along with actual cost data for May Standard Cost per Unit Actual Cost per Unit Direct materials Standard: 1.80 feet at $1.80 per foot Actual: 1.75 feet at $2.20 per foot $ 3.24 $3.85 Direct labor Standard: 0.90 hours at $19.00 per hour Actual: 0.95 hours at $18.40 per hour 17.10 17.48 Variable overhead Standard: 0.90 hours at $6.40 per hour Actual: 0.95 hours at $6.00 per hour 5.76 5.70 Total cost per unit $26.10 $27.03 Excess of actual cost over standard cost per unit $0.93 The production superintendent was pleased when she saw this report and commented: "This $0.93 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 12,000 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 1. Compute the following variances for May: a. Materials price and quantity variances. (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).) Materials quantity variance Materials price variance 1,080 $ 8,400