Glue For All has developed the following material standard to produce one container of Glue-It: 96 ounces of Chemical A at $0.15 per ounce. Glue For All planned to produce 2,000 containers of Glue- It during July. The company purchased 1,500 gallons (192,000 ounces) of Chemical A at a cost of $0.14 per ounce in July. The company used 1,480 gallons to produce 1,950 containers of Glue-It. How much is the material price variance? A) $1,920 favorable B) $1,894 favorable C) $336 unfavorable D) $1,584 unfavorable

Glue For All has developed the following material standard to produce one container of Glue-It: 96 ounces of Chemical A at $0.15 per ounce. Glue For All planned to produce 2,000 containers of Glue- It during July. The company purchased 1,500 gallons (192,000 ounces) of Chemical A at a cost of $0.14 per ounce in July. The company used 1,480 gallons to produce 1,950 containers of Glue-It. How much is the material price variance? A) $1,920 favorable B) $1,894 favorable C) $336 unfavorable D) $1,584 unfavorable

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 25P: Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio...

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Beverage Drink Company processes direct materials up to the split - off point where two products, A and B, are obtained. The following information was collected for the month of July: Direct materials processed: 3,000 liters (with 25% shrinkage) Production: A 1,800 liters 450 liters Sales: А $15 per liter B $10 per liter The cost of purchasing 3,000 liters of direct materials and processing it up to the split- off point to yield a total of 2,250 liters of good products was $9,500. There were no inventory balances of A and B. Product A may be processed further to yield 1,700 liters of Product Z5 for an additional processing cost of $190. Product Z5 is sold for $70 per liter. There was no beginning inventory and ending inventory was 125 liters. Product B may be processed further to yield 350 liters of Product W3 for an additional processing cost of $320. Product W3 is sold for $75 per liter. There was no beginning inventory and ending inventory was 25 liters. If Product Z5 and Product W3…
Baker Products manufactures faux boulders to be used in various landscaping applications. A special resin is used to make the boulders. The standard quantity of resin used for each boulder is 5 pounds. Baker Products uses a standard cost of $2.00 per pound for the resin. The company produced 3,800 boulders in June. In that month, 18,400 pounds of resin were purchased at a total cost of $46,000. A total of 18,250 pounds were used in producing the boulders in June. Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) DM price variance Requirements 1. Calculate the direct material…
Mitchell Products manufactures faux boulders to be used in various landscaping applications. A special resin is used to make the boulders. The standard quantity of resin used for each boulder is 2 pounds. Mitchell Products uses a standard cost of $1.80 per pound for the resin. The company produced 11,000 boulders in June. In D that month, 21,750 pounds of resin were purchased at a total cost of $43,500. A total of 21,500 pounds were used in producing the boulders in June. Read the requirements. Requirement 1. Calculate the direct material price variance. Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM= Direct materials) Actual quantity purchased i Actual price Standard price…
Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a rawmaterial called Echol. Information concerning the purchase and use of Echol follows:Purchase of Echol Echol is purchased in 15-gallon containers at a cost of $115 per container. A discount of2% is offered by the supplier for payment within 10 days, and Martin Company takes all discounts. Shipping costs, which Martin Company must pay, amount to $130 for an average shipment of 100 15-galloncontainers of Echol.Use of Echol The bill of materials calls for 7.6 quarts of Echol per bottle of cleaning solvent. (Each galloncontains four quarts.) About 5% of all Echol used is lost through spillage or evaporation (the 7.6 quartsabove is the actual content per bottle). In addition, statistical analysis has shown that every 41st bottle isrejected at final inspection because of contamination.Required:1. Compute the standard purchase price for one quart of Echol.2. Compute the standard quantity of…
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Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.30 per micron Direct labor: 1.3 hours per toy at $7.00 per hour During July, the company produced 4,800 Maze toys. The toy's production data for the month are as follows: Direct materials: 77,000 microns were purchased at a cost of $0.29 per micron. 35,000 of these microns were still in inventory at the end of the month. Direct labor. 6,540 direct labor-hours were worked at a cost of $49,704. Required: 1. Compute the following variances for July: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all mounts as positive values. Do round intermediate calculations. Round final answer the earest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance 1a. Material quantity variance 1b.…
Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 6 microns per toy at $0.34 per micron Direct labor. 12 hours per toy at $7.40 per hour During July, the company produced 5,400 Maze toys. The toy's production data for the month are as follows: Direct materials. 77,000 microns were purchased at a cost of $0.31 per micron. 36,500 of these microns were still in inventory at the end of the month. Direct labor 7,080 direct labor-hours were worked at a cost of $56,640. Required: 1. Compute the following variances for July. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances. 1a. Material price variance 1a. Material quantity variance…
Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL usage and price expectations. Direct materials 9 square yards per unit @ $4/square yard Direct labor 1.2 DL hours per unit @$12/DL hour Throughout the year, Blue used 32,430 square yards of fabric in the process of making 3,450 tents. The company had originally planned to produce and sell 3,150 tents. In keeping with its desire to hold some DM Inventory at year-end, it purchased 34,380 square yards of canvas at $4.20 per square yard. Blue's DL cost totaled $52,026 for the 4,002 hours that were actually used. (a) Determine Blue's DM and DL price and efficiency variances; specify the amount and sign for all. Price variance $ Efficiency A variance DM A +A DL
Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per toy at $0.35 per micron Direct labor: 1.5 hours per toy at $6.80 per hour During July, the company produced 5,100 Maze toys. The toy's production data for the month are as follows: Direct materials: 76,000 microns were purchased at a cost of $0.32 per micron. 31,375 of these microns were still in inventory at the end of the month. Direct labor. 8,050 direct labor-hours were worked at a cost of $58,765. Required: 1. Compute the following variances for July: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations. Round final answer to the nearest whole dollar amount. a. The materials price and quantity variances. b. The labor rate and efficiency variances.