47 Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 8.1 liters per unit Standard price $ 2.60 per liter $21.06 per unit Standard cost The company budgeted for production of 3,900 units in April, but actual production was 4,000 units. The company used 33,300 liters of direct material to produce this output. The company purchased 20,200 liters of the direct material at $2.70 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is: Multiple Choice $2,340 U 4

47 Turrubiates Corporation makes a product that uses a material with the following standards: Standard quantity 8.1 liters per unit Standard price $ 2.60 per liter $21.06 per unit Standard cost The company budgeted for production of 3,900 units in April, but actual production was 4,000 units. The company used 33,300 liters of direct material to produce this output. The company purchased 20,200 liters of the direct material at $2.70 per liter. The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for April is: Multiple Choice $2,340 U 4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.60 10.00 2.40 6.00 $ 22.00 An outside supplier has offered to sell 22,000 units of part S-6 each year to Han Products for $20 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $72,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?
Lemke Industries purchased and consumed 80,000 gallons of direct material that was used in the production of 21,000 finished units of product. According to engineering specifications, each finished unit had a manufacturing standard of four gallons. If the material price variance is $8,000 and the material quantity variance is $2,400F, what is the actual price paid for a gallon of direct material? Multiple Choice $0.60 $0.40 $0.70 None of the answers is correct Not enough information to judge
Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.80 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: Direct materials: 76,000 microns were purchased at a cost of $0.32 per micron. 31,375 of these microns were still in inventory at the end of the month. Direct labor. 8,050 direct labor-hours were worked at a cost of $58,765. Required: 1. Compute the following variances for July: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances.
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A company uses the following standard costs to produce a single unit of output. Direct materials 7 pounds at $0.90 per pound = $ 6.30 Direct labor 0.4 hour at $9.00 per hour = $ 3.60 Manufacturing overhead 0.4 hour at $4.20 per hour = $ 1.68 During the latest month, the company purchased and used 66,000 pounds of direct materials at a price of $1.30 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $32,336 based on 3,760 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $13,800 and fixed manufacturing overhead incurred was $20,000. Based on this information, the total direct materials variance for the month was:
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