Becton Labs, Inc., produces various chemical compounds for industrial use. Onecompound, called Fludex, is prepared using an elaborate distilling process. Thecompany has developed standard costs for one unit of Fludex, as follows:StandardStandard PriceStandardQuantityor RateCost42.00Direct materials2.00 ounces$21.00 per ounceDirect labor0.90 hours$12.00 per hour10.80Variable manufacturing0.90 hours$ 2.00 per hour1.80overhead54.60During November, the following activity was recorded relative to production of Fludex:a.Materials purchased, 10,000 ounces at a cost of $197,000.b.There was no beginning inventory of materials; however, at the end of the month,2,550 ounces of material remained in ending inventory.c. The company employs 24 lab technicians to work on the production of Fludex. DuringNovember, they worked an average of 170 hours at an average rate of $11.50 per hour.d.Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,800.e.During November, 3,700 good units of Fludex were produced.Required:1. For direct materials:a. Compute the price and quantity variances. (Input all amounts as positive values.Indicate the effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e, zero variance).)Materials price varianceMaterials quantity variance b. The materials were purchased from a new supplier who is anxlous to enter Into along-term purchase contract. Would you recommend that the company sign thecontract?YesNo2. For direct labor.a. Compute the rate and efficiency varlances. (Input all amounts as positive values.Indicate the effect of each varlance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (I.e, zero varlance).)Labor rate varianceLabor efficiency varianceb. In the past, the 24 technicians employed in the production of Fludex consisted of 6senior technicians and 18 assistants. During November, the company experimentedwith fewer senlor techniclans and more assistants In order to save costs. Wouldyou recommend that the new labor mix be continued?YesNo3. Compute the varlable overhead rate and efficiency variances. (Input all amounts aspositive values. Indicate the effect of each varlance by selecting "F" for favorable,"U" for unfavorable, and "None" for no effect (I.e, zero varlance).)Variable overhead rate varianceVariable overhead efficiency variance

The variance is computed by comparing standard cost and actual cost. The standards are settled on…

Answered: Becton Labs, Inc., produces various…

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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Beerfield Company manufactures product M in its factory. Production of M requires 2 pounds of material P, costing $10 per pound and 0.5 hour of direct labor costing, $16 per hour. The variable overhead rate is $14 per direct labor hour, and the fixed overhead rate is $18 per direct labor hour. What is the standard product cost for product M? Direct material Answer Direct labor Answer Variable overhead Answer Fixed overhead Answer Standard product cost per unit Answer
Lawn Products produces two products (X and Y) and a by-product (Z) from a joint process using a raw material (Alpha). The company chooses to allocate the costs on the basis of the physical quantities method. Last month, it processed 23,000 pounds of Alpha at a total cost of $99,000. The output of the process consisted of 28,800 units of product X, 35,200 units of product Y, and 7,100 units of by-product Z. By-product Z can be sold for $12,000. This is considered to be its net realizable value, which is deducted from the processing costs of the main products. Required: What amount of joint costs should be assigned to each of product X and product Y? Product X Product Y Joint Costs
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Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow: X-12 $35 $ 20 18.0 Price per fitting Variable cost per fitting Units per hour of grinding The testing machine used for both models has a capacity of 3,230 hours annually. Fixed manufacturing costs are $496,000 annually. Required A Required B X-24 $ 51 $ 27 12.5 Required: a. Suppose that Leach Finishing can sell at most 59,200 units of any one fitting. How many units of each fitting model should Leach Finishing produce annually? b. Suppose that Leach Finishing can sell at most 18,000 units of any one fitting. How many units of each fitting should Leach Finishing produce annually? X-30 $ 70 $ 44 10.0 Complete this question by entering your answers in the tabs below. X-12 X-24 X-30 units units units Suppose that Leach Finishing can…
Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance Machine setups Packing and shipping Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Rate per Cost Driver Unit 15% of materials cost $ 19 per machine-hour $ 6,370 per setup $ 4.20 per pound Direct materials costs were $508,000 and direct labor costs were $348,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories. Required: Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work- in-Process Inventory and out to Finished Goods Inventory. Use the accounts Materials Inventory, Wages Payable, Work-in- Process Inventory, Finished Goods Inventory, and four…
Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.80 Annual Production Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $20 per hour. Activity Cost Pool Machine setups Special processing General factory 26,000 units 90,000 units c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 33,300 $ 172,800 $ 858,000 Estimated Activity Rims 70 3,000 18,200 Posts 230 0 72,000 Total 300 3,000 90,200 2. Determine the unit product cost of each product…
Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, called Fludex, has the following standard cost per unit: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 2.40 ounces $ 18.00 per ounce $ 43.20 Direct labor 0.70 hours $ 14.00 per hour 9.80 Variable manufacturing overhead 0.70 hours $ 3.00 per hour 2.10 Total standard cost per unit $ 55.10 During November, the following activity was recorded related to the production of Fludex: Materials purchased, 12,000 ounces at a cost of $198,000. There was no beginning inventory of materials; however, at the end of the month, 3,200 ounces of material remained in ending inventory. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $12.00 per hour. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours.…
Howrley-David, Inc., manufactures two models of motorcycles: the Fatboy and the Screamer. Both models are assembled in the same plant and require the same assembling operations. The difference between the models is the cost of materials. The following data are available for August: Number of units assembled Materials cost per unit Other costs: Direct labor Indirect materials Other overhead Operation cost Materials cost Total cost Number of units Unit cost Fatboy 1,050 $ 2,400 $3,400 Fatboy Screamer 2,100 Required: Howrley-David uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in August. Screamer Total Total 3,150 $3,591,000 598,500 1,795,500
Aileen Co manufactures two components, L and M. Both components are manufactured on the machine ZX. The following cost information per unit of L and M is available: Direct material Direct labour Variable overhead Fixed overhead Total cost L M ($) ($) 12 18 25 15 8 7 6 46 10 55 Component L requires three hours on machine ZX and component M requires five hours. Manufacturing requirements show a need for 1,500 units of each component per week. The maximum number of machine ZX hours available per week is 10,000. An external supplier has offered to supply Aileen Co with the components for a price of $57 per component L and $55 per component M. Identify, by clicking on the relevant boxes in the table below, whether each of the following statements are true or false. would be cheaper for Aileen Co to produce all the components in-house if the hours on machine ZX were available Aileen Co should purchase 400 units of component M from the external supplier TRUE TRUE FALSE FALSE
Becton Labs, Incorporated, produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or 2.50 Hours ounces 0.90 hours Standard Price or Rate $ 22.00 per ounce $ 16.00 per hour 0.90 hours $ 2.00 per hour Standard Cost $ 55.00 14.40 1.80 $ 71.20 During November, the following activity was recorded related to the production of Fludex: a. Materials purchased, 14,000 ounces at a cost of $289,800. b. There was no beginning inventory of materials; however, at the end of the month, 4,050 ounces of material remained in ending inventory. c. The company employs 26 lab technicians to work on the production of Fludex. During November, they each worked an average of 150 hours at an average pay rate of $15.00 per hour. d. Variable…
Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $27 per machine hour Assembly $11 per direct labor hour Setup $45 per setup Inspecting $23 per inspection Production scheduling $12 per production order Purchasing $9 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,861 1,098 Direct labor hours 413 161 Setups 62 19 Inspections 615 369 Production orders 65 13 Purchase orders 211 129 Units produced 295 198 Use the activity rate and usage information to calculate the total activity cost and…

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