PROBLEM $10-23$

Multiple Products, Materials, and Processes $[$ LO$1,$ LO$2,$ LO$3,$ LO$4]$

Mickley Corporation produces two products, Alpha$6$ and Zeta$7,$ which pass through two operations, Sintering and Finishing. Each of

the products uses two raw materials, X$442$ and Y$661.$ The company uses a standard cost system, with the following standards for each

product $($on a per unit basis$)$:

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

The following additional information is available:

The company recognizes price variances when materials are purchased.

The standard labour rate is $$19\mathrm{.}80$ per hour in Sintering and $$19\mathrm{.}20$ per hour in Finishing.

During May, $1,200$ direct labour$-$hours were worked in Sintering at a total labour cost of $$27,000,$ and $2,850$ direct labour$-$hours were

worked in Finishing at a total labour cost of $$59,850.$

Production during May was $1,500$ Alpha$6$ and $2,000$ Zeta$7.$

Required:

Prepare a standard cost card for each product, showing the standard cost of direct materials and direct labour.

Compute the materials price and quantity variances for each material.

Compute the labour rate and efficiency variances for each operation.