| Compute the companys revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the companys products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,900 helmets, using 2,769 kilograms of plastic. The plastic cost the company $18,275. | According to the standard cost card, each helmet should require 0.62 kilograms of plastic, at a cost of $7.00 per kilogram. | | Required: | | 1. | According to the standards, what cost for plastic should have been incurred to make 3,900 helmets? How much greater or less is this than the cost that was incurred? (Round Standard kilograms of plastic per helmet to 2 decimal places.) | | | | | 2. | Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Round your actual materials price to two decimal places, and round your final answers to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) | SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the companys products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 7,200 of these meals using 3,500 direct labor-hours. The company paid these direct labor workers a total of $31,500 for this work, or $9.00 per hour. | | According to the standard cost card for this meal, it should require 0.50 direct labor-hours at a cost of $8.50 per hour. | | Required: | | 1. | According to the standards, what direct labor cost should have been incurred to prepare 7,200 meals? How much does this differ from the actual direct labor cost? (Round labor-hours per meal and labor cost per hour to 2 decimal places.) | | | | | 2. | Break down the difference computed in (1) above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. | In the most recent month, 175,000 items were shipped to customers using 7,400 direct labor-hours. The company incurred a total of $24,790 in variable overhead costs. | | According to the companys standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.40 per direct labor-hour. | | Required: | | 1. | According to the standards, what variable overhead cost should have been incurred to fill the orders for the 175,000 items? How much does this differ from the actual variable overhead cost? (Round labor-hours per item and overhead cost per hour to 2 decimal places.) | | | | | 2. | Break down the difference computed in (1) above into a variable overhead rate variance and a variable overhead efficiency variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) | | | Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the companys costs: | | Fixed Cost per Month | | Cost per Car Washed | | Cleaning supplies | | | | $ | 0.40 | | Electricity | $ | 1,300 | | $ | 0.08 | | Maintenance | | | | $ | 0.20 | | Wages and salaries | $ | 4,300 | | $ | 0.40 | | Depreciation | $ | 8,200 | | | | | Rent | $ | 1,900 | | | | | Administrative expenses | $ | 1,600 | | $ | 0.01 | | | | For example, electricity costs are $1,300 per month plus $0.08 per car washed. The company expects to wash 8,300 cars in August and to collect an average of $6.30 per car washed. | | Required: | | Complete the companys planning budget for August. | | | The auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard labor cost for a motor tune-up is given below: | Job | Standard Hours | Standard Rate | Standard Cost | | Motor tune-up | 2.00 | $6.40 | $12.80 | | | | The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 210 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups: | | | | | | | Labor rate variance | $ | 282 | F | | Labor spending variance | $ | 38 | U | | | | Required: | | 1. | Determine the number of actual labor-hours spent on tune-ups during the week. | | | | | 2. | Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.) | | | | Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: | | Standard Quantity or Hours | Standard Price or Rate | Standard Cost | | Direct materials | 6.00 | pounds | $ | 2.30 | per pounds | $ | 13.80 | | Direct labor | 0.50 | hours | $ | 10.00 | per hour | $ | 5.00 | | | | During the most recent month, the following activity was recorded: | | a. | 11,000 pounds of material were purchased at a cost of $2.10 per pound. | | b. | All of the material purchased was used to produce 1,500 units of Zoom. | | c. | 500 hours of direct labor time were recorded at a total labor cost of $6,500. | | 1. | Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) | | | | | 2. | Compute the labor rate and efficiency variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Do not round your intermediate calculations | Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: | | | Standard Quantity or Hours | Standard Price or Rate | Standard Cost | | Direct materials | 6.5 | pounds | $ | 2.50 | per pound | $ | 16.25 | | Direct labor | 0.5 | hours | $ | 11.50 | per hour | $ | 5.75 | | | | During the most recent month, the following activity was recorded: | | a. | Twelve thousand six hundred pounds of material were purchased at a cost of $2.40 per pound. | | b. | The company produced only 1,260 units, using 11,340 pounds of material. (The rest of the material purchased remained in raw materials inventory.) | | c. | Seven hundred and thirty hours of direct labor time were recorded at a total labor cost of $8,760. | | Required: | | Compute the materials price and quantity variances for the month. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) | | a Gelato is a popular neighborhood gelato shop. The company has provided the following data concerning its operations: | | Fixed Element per Month | Variable Element per Liter | Actual Total for June | | Revenue | | | $ | 24.00 | $ | 150,540 | | Raw materials | | | $ | 5.85 | $ | 38,930 | | Wages | $ | 6,800 | $ | 2.60 | $ | 23,700 | | Utilities | $ | 2,830 | $ | 1.40 | $ | 12,400 | | Rent | $ | 3,800 | | | $ | 3,800 | | Insurance | $ | 2,550 | | | $ | 2,550 | | Miscellaneous | $ | 770 | $ | 1.55 | $ | 10,790 | | | | While gelato is sold by the cone or cup, the shop measures its activity in terms of the total number of liters of gelato sold. For example, wages should be $6,800 plus $2.60 per liter of gelato sold and the actual wages for June were $23,700. Via Gelato expected to sell 6,400 liters in June, but actually sold 6,600 liters. | | Required: | | Complete the report showing Via Gelato revenue and spending variances for June. (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).) | | Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: | | Direct materials: 7 microns per toy at $0.30 per micron | | Direct labor: 1.3 hours per toy at $6.80 per hour | | During July, the company produced 5,400 Maze toys. Production data for the month on the toy follow: | | Direct materials: 72,000 microns were purchased at a cost of $0.29 per micron. 24,750 of these microns were still in inventory at the end of the month. | | Direct labor: 7,520 direct labor-hours were worked at a cost of $54,144. | | Required: | | 1. | Compute the following variances for July: (Do not round intermediate calculations. Round final answer to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) | | a. | The materials price and quantity variances. | | | | | b. | The labor rate and efficiency variances. | | | | | | | | | | |
