Assignments: ACG 2071-CR: xy D HW10 C O ezto.mheducation.com/hm.tpx You have rec

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Assignments: ACG 2071-CR: xy D HW10 C O ezto.mheducation.com/hm.tpx You have recently accepted a position with Vitex, Inc., the manufacturer of a popular consumer product During your first week on the job, the vice president has been favorably impressed with your work. She has executive committee meeting this morming for the purpose of leading a discussion on the variances reported for last period. Andious to favorably impress the executive commitee, you took the variance and supporting data home last night to study. On your way to work this morning, the papers were laying on the seat of your new, red convertible. As you were crossing a bridge on the highway, a sudden gust of wind caught the papers and blew them over edge of the bridge and into the stream below. You managed to retrieve only one page, which contains the following information: Standard Cost Card Direct materials, 2.10 pounds at $16.30 per pound Direct labor, 1.00 direct labor-hours at $15.50 per direct labor-hour Variable manufacturing overhead, 1.00 direct labor-hours at $9.50 per direct labor-hour S 34.23 15.50 9.50 Variances Reported Total Standard Cost $ 513,450 $ 232,500 $ 142,500 or Rate $ 9,715 F $ 3,200 U $4,700 F Quantity or Efficiency S32,600 U $15,500 U Direct materials Direct labor Variable manufacturing oTehead Applied to Work in Process during the period Entry obliterated. You recall that manufacturing overhead cost is applied to production on the basis of direct labor-hours and that all of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored. It is now 830 am. The executive committee meeting starts in just one hour-yo, realize that to avoid looking like a bungling fool you must somehow generate the necessary "backup data for the variances before the meeting begins. Without backup data it will be impossible to lead the discussion or answer any Required: 1. How many units were produced last period? 15,000 2. How many pounds of direct material were purchased and used in production? MacBook P

Explanation / Answer

Materials:

Standard cost= 5134505

Actual units produced= standard cost/ standard cost per unit= 513450/34.23= 15000 units

Standard quanity of direct material required= units produced* direct material per unit= 15000*2.1= 31500 pounds

Direct material cost variance= price variance+efficiency variance= 9715-32600= -22885

Direct material cost variance= standard cost - actual cost

-22885= 513450 -Actual cost

Actual cost= 536335

Direct material Quantity variance= Standard price*(standard quantity- actual quantity)

-32600= 16.3*(31500-AQ)

AQ= 33500 pounds

Actual cost= actual quanity* actual rate= 536335

33500* AR= 536335

Acutal rate= 16.01

Hence,

2. pounds of direct materials used= 33500

3. Actual cost per pound= 16.01

Direct labor:

Standard labor hours= actual units produced= 15000

Direct labor cost variance= rate variance+efficiency variance= -3200-15500= -18700

Direct labor efficiency variance= Standard rate*(Standard hours-actual hours)

-15500= 15.5*(15000-AH)

4. Actual hours= 16000

5. Direct labor rate per hour= actual total cost/ actual hours= 251200/16000= 15.7 per hour

6. Actual hours applied= 16000

Standard hours= 15000

Standard rate= 9.5

Rate variance= Actual hours*(standard rate-actual rate)

4700= 16000*(9.5-AR)

AR= 9.20625

Actual variable oh= 16000* 9.20625= 147300

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