Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are: Direct Materials (1 sheet of aluminum @ $10.00) $10.00 Direct Materials (other accessories @ $8.75) 8.75 Direct Labor (6 hours @ $7.00) 42.00 Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes. a.15000 sheets b.11250 sheets c.7500 sheets d.10000 sheets
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheets of aluminum. It normally manufactures 7,500 airplanes. Materials and labor standards for making the airplanes are: Direct Materials (1 sheet of aluminum @ $10.00) $10.00 Direct Materials (other accessories @ $8.75) 8.75 Direct Labor (6 hours @ $7.00) 42.00 Compute the standard number of sheets of aluminum allowed for a volume of 10,000 airplanes.
a.15000 sheets
b.11250 sheets
c.7500 sheets
d.10000 sheets
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