1. Ortman Corporation makes a product with the following standard costs: The com

Question

1. Ortman Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in May:

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for May is:

2. Fruchter Corporation keeps careful track of the time required to fill orders. The times recorded for a particular order appear below:

The throughput time was:

3. Cabal Products is a division of a major corporation. Last year the division had total sales of $13,143,500, net operating income of $661,540, and average operating assets of $4,850,000. The company's minimum required rate of return is 13%.

The division's margin is closest to:

Standard Quantity or Hours Standard Price or Rate Direct materials 7.3 liters $8.00 per liter Direct labor 1.7 hours $23.00 per hour Variable overhead 1.7 hours $2.00 per hour

Explanation / Answer

1 Variable overhead rate variance =3810*(1.7-2)= 1143 F 2 Throughput time = Process time + Inspection time + Move time + Queue time = 2.8+6.3+24.5+0.6= 34.2 3 Margin = Net operating income/Sales = 661540/13143500= 5.03%

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