Question
Provide a Quantity AND Price Variance for Acrylic pile fabric, 10-mm acrylic eyes, 45-mm plastic joints, Polyester fiber filling, Woven label, Designer box and Direct
Provide a Quantity AND Price Variance for Acrylic pile fabric, 10-mm acrylic eyes, 45-mm plastic joints, Polyester fiber filling, Woven label, Designer box and Direct Labor using the information provided in Tables 1,2 and 3.
TABLE 1 Berkshire Toy Company A Division of Quality Products Corporation Preliminary Statement of Divisional Operating Income for the Year Ended June 30, 1998 Master Master (Static) Budget Actual Budget Variance Units sold 325,556 280,000 45,556 F Retail and catalog (174,965 units) $ 8,573,285 $11,662,000 $ 3,088,715 U Internet (105,429 units) 4,428,018 0 4,428,018 F Wholesale (45,162 units) 1,445,184 1,344,000 101,184 F Total revenue 14,446,487 13,006,000 1,440,487 F Variable production costs: Direct materials Acrylic pile fabric 256,422 233,324 23,098 U 10-mm acrylic eyes 125,637 106,400 19,237 U 45-mm plastic joints 246,002 196,000 50,002 U Polyester fiber filling 450,856 365,400 85,456 U Woven label 16,422 14,000 2,422 U Designer Box 69,488 67,200 2,288 U Accessories 66,013 33,600 32,413 U Total direct materials 1,230,840 1,015,924 214,916 U Direct labor 3,668,305 2,688,000 980,305 U Variable overhead 1,725,665 1,046,304 679,361 U Total variable production costs 6,624,810 4,750,228 1,874,582 U Variable selling expenses 1,859,594 1,218,280 641,314 U Total variable expenses 8,484,404 5,968,508 2,515,896 U Contribution margin 5,962,083 7,037,492 1,075,409 U Fixed costs: Manufacturing overhead 658,897 661,920 3,023 F Selling expenses 5,023,192 4,463,000 560,192 U Administrative expenses 1,123,739 1,124,000 261 F Total fixed costs 6,805,828 6,248,920 556,908 U Operating incomea $ ( 843,745) $ 788,572 $ 1,632,317 U
TABLE 2 Berkshire Toy Company A Division of Quality Products Corporation Schedule of Standard Costs: Fifteen-Inch Berkshire Bear Normal Capacity: 280,000 units Quantity Standard Allowed Input Cost Per Unit Price Per Unit Direct materials Acrylic pile fabrica 0.02381 bolts $35.00/bolt $ 0.8333 10-mm acrylic eyes 2 eyes $0.19/eye 0.3800 45-mm plastic joints 5 joints $0.14/joint 0.7000 Polyester fiber filling 0.90 lbs. $1.45/lb. 1.3050 Woven label 1 label $0.05/each .0500 Designer box 1 box $0.24/each .2400 Accessoriesb various .1200 Total direct materials 3.6283 Direct labor Sewing 0.50 hours Stuffing and cuttingc 0.30 hours Assembly 0.30 hours Dressing and packaging 0.10 hours Total direct labor 1.20 hours $8.00/hour 9.6000
TABLE 3 Berkshire Toy Company A Division of Quality Products Corporation Schedule of Actual Manufacturing Costs for the Year Ended June 30, 1998 Quantity Input Total Used Price Cost Direct materials Acrylic pile fabric 7,910 bolts $32.4174/bolt $ 256,422 10-mm acrylic eyes 661,248 eyes $0.1900/eye 125,637 45-mm plastic joints 1,937,023 joints $0.1270/joint 246,002 Polyester fiber filling 344,165 lbs. $1.3100/lb. 450,856 Woven label 328,447 labels $0.0500 each 16,422 Designer box 315,854 boxes $0.2200 each 69,488 Accessories various 66,013a Total direct materials 1,230,840 Direct labor Sewing 189,211 hours Stuffing and cutting 104,117 hours Assembly 121,054 hours Dressing and packaging 34,615 hours Total direct labor 448,997 hours $8.1700/hour 3,668,305
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