7.27 Deviations of raw materials and production work, standard costs. The following selective data are given on a production line of padded seats: Standard values per seat Direct raw materials Direct production work 2 m of raw material at $10 per m 0.5 hours of work at $20 per hour The following data were compiled on the actual results: actual production-20,000 units (chairs); raw materials purchased and used -37,000 m; raw material price - $10,20/m²; direct cost of production work $176,400; the actual number of hours of direct work - 9,000; direct labor price- $19.60/time. 1. Present the calculations of price and efficiency deviations of direct raw materials and direct production work. Provide a plausible explanation of the causes that caused these deviations. 2. Suppose that 60,000 m² of raw materials were bought (at the price of $10.20/mf), although only 37,000 m. Let us assume, moreover, that the deviations are identified at the control point most likely; consequently, the price deviations of direct raw materials are separated and tracked by the supply department and not by the production department. Calculate price and efficiency deviations under these conditions.
7.27 Deviations of raw materials and production work, standard costs. The following selective data are given on a production line of padded seats: Standard values per seat Direct raw materials Direct production work 2 m of raw material at $10 per m 0.5 hours of work at $20 per hour The following data were compiled on the actual results: actual production-20,000 units (chairs); raw materials purchased and used -37,000 m; raw material price - $10,20/m²; direct cost of production work $176,400; the actual number of hours of direct work - 9,000; direct labor price- $19.60/time. 1. Present the calculations of price and efficiency deviations of direct raw materials and direct production work. Provide a plausible explanation of the causes that caused these deviations. 2. Suppose that 60,000 m² of raw materials were bought (at the price of $10.20/mf), although only 37,000 m. Let us assume, moreover, that the deviations are identified at the control point most likely; consequently, the price deviations of direct raw materials are separated and tracked by the supply department and not by the production department. Calculate price and efficiency deviations under these conditions.
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Can you help me with the 7.27 question? Thanks in advance.
Transcribed Image Text:7.27 Deviations of raw materials and production work, standard costs. The following selective data are given on a production line of padded
seats:
Standard values per seat
2 m of raw material at $10 per m
0.5 hours of work at $20 per hour
Direct raw materials
Direct production work
The following data were compiled on the actual results: actual production-20,000 units (chairs); raw materials purchased and used -37,000 m;
raw material price - $10,20/m; direct cost of production work $176,400; the actual number of hours of direct work - 9,000; direct labor price-
$19.60/time.
1. Present the calculations of price and efficiency deviations of direct raw materials and direct production work. Provide a plausible explanation
of the causes that caused these deviations.
2. Suppose that 60,000 m of raw materials were bought (at the price of $10.20/m), although only 37,000 m. Let us assume, moreover, that the
deviations are identified at the control point most likely; consequently, the price deviations of direct raw materials are separated and tracked by
the supply department and not by the production department. Calculate price and efficiency deviations under these conditions.
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