Chrome File Edit View History Assignments: ACG 2071-CRIxHW 10 ·COezto. Becton La

Question

Chrome File Edit View History Assignments: ACG 2071-CRIxHW 10 ·COezto. Becton Labs, Inc, produces various chemical compounds for industrial use. One compound, called Fludex, e precared using an elisborate ditiling process. The company has developed standard costs for one unit of Fludex, as follows: or Rate $ 55.00 7.50 1.50 $25.00 per Direct materials Direct labor Variable manufacturing overhead 0.50 hours 2 20 ounces 0.50 houns ounce $15.00 per hour 3.00 per hour $64.00 During November, the following activity was recorded relative to production of Fludex a Materials purchased, 12,000 ounces at a cost of $282,000 b. There was no beginning invetory of materials; however, at the end of the month, 2,750 ounces of C. The company employs 25 lab sechnicians to work on the production of Fludex. During November, they d. Variable manufacturing overhead is assigned to Fladex on the basis of direct labor-hours. Variable e. During November, 4,100 good units of Fludex were produced material remained in ending inventory worked an average of 110 hours at an average rate of $11.50 per hour manufacturing overhead costs during November totaled $2,400 1. For direct materials a. Compute the price and quantity varlances. Input all amounts as positive values. Indicate the for favorable, "U for unfavorable, and "None" for no effect of each variance by selecting effect (La, zero varlance)-) Materials price Materials quantity variance MacBook Pro esc 0 2 3.

Explanation / Answer

1

a) DMPV = (Actual Price - Standard price) Actual usage = (282000/12000) - 25) (12000 - 2750) = (23.50-25) 9250 = $13875 F

DMQV = ( Standard quantity required for actual units - Actual usage) Standard Price = [(4100*2.20) - (12000 - 2750) ] 25 = (9020 - 9250) 25 = $5750 U

b) Yes, being the total material variance is favourable by $13875 -5750 = $8125.

2)

a) DLRV = (Actual Rate - Standard Rate) Actual hours = (11.50 - 15) (25*110) = $9625 F

DLEV = ( Standard hours required for actual units - Actual hours) Standard rate = [(4100*0.50) - (25*110) ] 15 = (2050 - 2750) 15 = $10500 U

b) No, being the total labor variance is unfavourable $10500 - $9625 = $875.

3)

VORV = (Actual Rate - Standard Rate) Actual hours = [(2400/(25*110) - 3] (25*110) = (0.87 - 3)* 2750 = $5857.5 F

VOEV = ( Standard hours required for actual units - Actual hours) Standard rate = [(4100*0.50) - (25*110) ] 3 = (2050 - 2750) 3 = $2100 U

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