Exercise 1) Deporte Company produces single-colored t-shirts. Material for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (1.6lbs. @ $0.95) Direct labor (0.75 hr. @ $7.40) Standard prime cost $1.52 5.55 $7.07 During the year, 50,000 pounds of material were purchased and used for the changeover activity. There were 30,300 batches produced, with the following actual prime costs: Direct materials $49,500 Direct labor $169,875 (for 22,500 hrs.) Required: Compute MPV, MUV, LRV, and LEV.
Exercise 1) Deporte Company produces single-colored t-shirts. Material for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (1.6lbs. @ $0.95) Direct labor (0.75 hr. @ $7.40) Standard prime cost $1.52 5.55 $7.07 During the year, 50,000 pounds of material were purchased and used for the changeover activity. There were 30,300 batches produced, with the following actual prime costs: Direct materials $49,500 Direct labor $169,875 (for 22,500 hrs.) Required: Compute MPV, MUV, LRV, and LEV.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 1) Deporte Company produces single-colored t-shirts. Material for the shirts are dyed
in large vats. After dying the materials for a given color, the vats must be cleaned and prepared
for the next batch of materials to be colored. The following standards for changeover for a given
batch have been established:
Direct materials (1.6lbs. @ $0.95)
Direct labor (0.75 hr. @ $7.40)
Standard prime cost
$1.52
5.55
$7.07
During the year, 50,000 pounds of material were purchased and used for the changeover activity.
There were 30,300 batches produced, with the following actual prime costs:
Direct materials
Direct labor
$49,500
$169,875 (for 22,500 hrs.)
Required: Compute MPV, MUV, LRV, and LEV.
Exercise 2) At the beginning of the year, Honey Company had beginning operating assets of
$198,000. During the year, Honey Co. had operating income of $25,500 and expenses of
$124,500. At the end of the year, they had operating assets of $177,000.
Required: Compute profit margin, turnover, and ROI for Honey Company.
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