(PLEASE DO IN EXCEL & SHOW WORK!!!! Thank you!!!) The Lynbrook Corporation produ
ID: 2573895 • Letter: #
Question
(PLEASE DO IN EXCEL & SHOW WORK!!!! Thank you!!!)
The Lynbrook Corporation produces and sells taffy by the bag and uses a standard cost system to collect costs related to production. The following information relates to Lynbrook’s operations for last month:
1. Number of bags of taffy sold................................................100,000
2. Standard price of direct materials........................................ $ 0.80
3. Standard direct labor rate per hour...................................... $ 14.00
4. Actual quantity of direct material purchased (in pounds)..... ????
5. Standard quantity of direct materials per bag (in pounds).... 1.1
6. Actual quantity of direct materials used................................. ????
7. Standard quantity of direct labor per bag (in hours).............. ????
8. Number of bags produced.................................................... 120,000
9. Actual price paid for direct materials (per pound)................ $ 0.81
10. Actual direct labor rate per hour........................................ ????
11. Actual quantity of direct labor (in hours)........................... 13,000
12. Labor rate variance.......................................................... $ 2,600 F
13. Materials quantity variance.............................................. $7,200 U
14. Materials price variance.................................................. $1,400 U
15. Labor efficiency variance................................................ $ 19,600 F
Required:
Compute the unknown quantities above. (Numbers 4, 6, 7, and 10.) It is strongly recommended that you use the format discussed in class to prepare the solution to this problem.
Note: All computations must be supported by excel formulas
Explanation / Answer
4) Actual quantity of direct material purchased (in pounds)
Material price variance= (standard price-actual price) actual quantity purchased'
-1400 = (.80X-.81X)
-1400 = -.01X
X(Actual qunatity purchased) = 1400/.01 = 140000 pounds
6. Actual quantity of direct materials used..
material quantity variance = (standard quantity-actual quantity)standard price
-7200 = (120000*1.1-X)0.80
-7200 = 105600-.80X
.80X = 112800
X(actual quantity used) = 141000
7. Standard quantity of direct labor per bag (in hours)
Labour efficiency variance = (standard hours-actual hours)standard rate
19600 = (X-13000)14
19600 = 14X-182000
-14X = -201600
X(standard hour) = 14400 hours
Standard quantity of direct labor per bag (in hours) = 14400/120000 = 0.12 per hours
10. Actual direct labor rate per hour.
Labour rate variance = (standard rate-actual rate)actual hours
2600 = (14*13000-13000*X)
2600 = 182000-13000X
13000X = 179400
X(Actual rate per hour) = 179400/13000 = 13.8 per hour
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