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During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb..... Plastic Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb..... Production labor-2,700 hr @ $8.60 per hr Factory overhead.... Costs charged to production. $ 760 2,280 1,330 23,220 7,140 $34,730 Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: Aluminum-1,800 lb @ $.48 per lb. Plastic Regular grade-3,000 lb @ $.50 per lb.... Low grade -6,000 lb @ $.29 per lb 77v3.ee $ 864 1,500 1,740 *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas in Determination of Variances RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb. Plastic-1.0 lb @ $.38 per lb..... Production labor-3 hr @ $8.00 per hr Factory overhead. Total.. $ .08 38 2.40 84 $3.70

During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb..... Plastic Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb..... Production labor-2,700 hr @ $8.60 per hr Factory overhead.... Costs charged to production. $ 760 2,280 1,330 23,220 7,140 $34,730 Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: Aluminum-1,800 lb @ $.48 per lb. Plastic Regular grade-3,000 lb @ $.50 per lb.... Low grade -6,000 lb @ $.29 per lb 77v3.ee $ 864 1,500 1,740 *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas in Determination of Variances RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb. Plastic-1.0 lb @ $.38 per lb..... Production labor-3 hr @ $8.00 per hr Factory overhead. Total.. $ .08 38 2.40 84 $3.70

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb..... Plastic Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb..... Production labor-2,700 hr @ $8.60 per hr Factory overhead.... Costs charged to production. $ 760 2,280 1,330 23,220 7,140 $34,730 Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: Aluminum-1,800 lb @ $.48 per lb. Plastic Regular grade-3,000 lb @ $.50 per lb.... Low grade -6,000 lb @ $.29 per lb 77v3.ee $ 864 1,500 1,740 *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas in Determination of Variances
Transcribed Image Text:During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb..... Plastic Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb..... Production labor-2,700 hr @ $8.60 per hr Factory overhead.... Costs charged to production. $ 760 2,280 1,330 23,220 7,140 $34,730 Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: Aluminum-1,800 lb @ $.48 per lb. Plastic Regular grade-3,000 lb @ $.50 per lb.... Low grade -6,000 lb @ $.29 per lb 77v3.ee $ 864 1,500 1,740 *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas in Determination of Variances
RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb. Plastic-1.0 lb @ $.38 per lb..... Production labor-3 hr @ $8.00 per hr Factory overhead. Total.. $ .08 38 2.40 84 $3.70
Transcribed Image Text:RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb. Plastic-1.0 lb @ $.38 per lb..... Production labor-3 hr @ $8.00 per hr Factory overhead. Total.. $ .08 38 2.40 84 $3.70
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