Question 7 30 Nantucket Enterprises manufactures insulated cold beverage cups printed with college and corporate logos, which it distributes nationally in lots of 12 dozen cups In June, Nantucket produced 5,000 lots of its most popular line of cups, the 24 ounce lidded tumbler, at each of its two plants, which are located in Providence and Amherst The production manager, Shannon Bryant, asks her assistant, Joel Hudson, to find out the prices per unit budgeted variable costs at the two plants and the variable costs of competitor, Beverage Mate, who offers similar quality tumblers at cheaper prices Hudson pulls together the following information for each lot Per lot Providence Plant Amherst Plant Beverage Mate Direct materials 74lbs $3 20 per lbs 76 5 lbs $3 10 per lb 70 lbs $2 90 per lb Direct manufacturing labour 2 5 hrs $12 00 per hr 2 4 hrs $12 20 per hr 2 4 hrs $10 50 per hr Variable overhead $20 per lot $22 per lot $20 per lot Required What is the budgeted variable cost per lot at the Providence Plant, the Amherst Plant, and at Beverage Mate Using the Beverage Mate data as the standard, calculate the direct materials and direct manufacturing labour price and efficiency variances for the Providence Plants What advantages does Nantucket get by using Beverage Mates benchmark data as standards in calculating its variances Identify two issues that Bryant should keep in mind in using the Beverage Mate, data as the standards

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 05, 2024

Question 7-30: Nantucket Enterprises manufactures insulated cold beverage cups printed with college and corporate logos, which it distributes nationally in lots of 12 dozen cups.

Question 7-30: Nantucket Enterprises manufactures insulated cold beverage cups printed with college and corporate logos, which it distributes nationally in lots of 12 dozen cups. In June, Nantucket produced 5,000 lots of its most popular line of cups, the 24-ounce lidded tumbler, at each of its two plants, which are located in Providence and Amherst. The production manager, Shannon Bryant, asks her assistant, Joel Hudson, to find out the prices per-unit budgeted variable costs at the two plants and the variable costs of competitor, Beverage Mate, who offers similar-quality tumblers at cheaper prices. Hudson pulls together the following information for each lot:

Per lot	Providence Plant	Amherst Plant	Beverage Mate
Direct materials	74lbs. @ $3.20 per lbs.	76.5 lbs. @ $3.10 per lb.	70 lbs. @ $2.90 per lb.
Direct manufacturing labour	2.5 hrs. @ $12.00 per hr.	2.4 hrs. @ $12.20 per hr.	2.4 hrs. @ $10.50 per hr.
Variable overhead	$20 per lot	$22 per lot	$20 per lot

Required:

What is the budgeted variable cost per lot at the Providence Plant, the Amherst Plant, and at Beverage Mate?
Using the Beverage Mate data as the standard, calculate the direct materials and direct manufacturing labour price and efficiency variances for the Providence Plants.
What advantages does Nantucket get by using Beverage Mates benchmark data as standards in calculating its variances? Identify two issues that Bryant should keep in mind in using the Beverage Mate, data as the standards.