Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass throug

Question

Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis):

  

Raw Material

Standard Labor Time

Information relating to materials purchased and materials used in production during May follows:

  

The following additional information is available:

The company recognizes price variances when materials are purchased.

The standard labor rate is $21.00 per hour in Sintering and $20.00 per hour in Finishing.

During May, 1,350 direct labor-hours were worked in Sintering at a total labor cost of $33,210, and 2,990 direct labor-hours were worked in Finishing at a total labor cost of $65,780.

Production during May was 2,000 Alpha6s and 1,200 Zeta7s.

Requied:

1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.)

2. Compute the materials price and quantity variances for each material. (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).)

3. Compute the labor rate and efficiency variances for each operation. (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).)

Raw Material

Standard Labor Time

Product X442 Y661 Sintering Finishing Alpha6 2.5 kilos 2.5 liters 0.40 hours 1.20 hours Zeta7 4.5 kilos 5.5 liters 0.40 hours 0.80 hours

Explanation / Answer

1.

2.

Workings:

X442: Price variance

X442: Quantity variance

Y661: Price variance

Y661: Quantity variance

3.

Workings:

Sintering:

Finishing:

Standard
Quantity or Hours Standard
Price or Rate Standard Cost Alpha6: Direct materials-X442 2.5 kilos 2.80 per kilo 7.00 Direct materials-Y661 2.5 liters 1.80 per liter 4.50 Total direct materials 11.50 Direct labor-Sintering 0.40 hours 21.00 per hour 8.40 Direct labor-Finishing 1.20 hours 20.00 per hour 24.00 Total direct labor 32.40 Total $ 43.90 Zeta7: Direct materials-X442 4.5 kilos 2.80 per kilo 12.60 Direct materials-Y661 5.5 liters 1.80 per liter 9.90 Total direct materials 22.50 Direct labor-Sintering 0.40 hours 21.00 per hour 8.40 Direct labor-Finishing 0.80 hours 20.00 per hour 16 Total direct labor 24.40 Total $ 46.90

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