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Home Insert Page Layout Formulas Data Review View A Quantity per Standard Cost Item Mini SD card Unit Costs 3 Direct materials: $0.05 /mm 0.10 lunit 0.50 lunit 4 Specialty polymer 17 mm Connector pins 10 units Wi-Fi transreceiver 1 unit Direct manufacturing labor: Setup Fabrication 1 min. 2 min. 24.00 /hr. 30.00 /hr. 10 Phoebe King, the CEO, is disappointed with the results for June 2017, especially in comparison to her expec- tations based on the standard cost data. Home Insert Page Layout Formulas Data Review View 13 Performance Report, June 2017 Actual Budget Variance 14 15 Output units 16 Revenues 17 Direct materials 18 Direct manufacturing labor 462,000 420,000 42,000 $266,700 $3,626,700 1,200,000 $3,360,000 987,000 213,000 628,400 588,000 40,400 2. 6. King observes that despite the significant increase in the output of Mini SDs in June, the product's contribu- tion to the company's profitability has been lower than expected. She gathers the following information to help analyze the situation: Home Insert Page Layout Formulas Data Review View 21 Input Usage Report, June 2017 22 Cost Item Quantity Actual Cost 23 Direct materials: Specialty polymer Connector pins Wi-Fi transreceiver 24 8,300,000 mm $415,000 5,000,000 units 550,000 235,000 25 26 470,000 units 27 28 Direct manufacturing labor: Setup 455,000 min. 182,000 29 30 Fabrication 864,000 min. 446,400 Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another: 1. Selling-price variance 2. Direct materials price variance, for each category of materials 3. Direct materials efficiency variance, for each category of materials 4. Direct manufacturing labor price variance, for setup and fabrication 5. Direct manufacturing labor efficiency variance, for setup and fabrication Required

Home Insert Page Layout Formulas Data Review View A Quantity per Standard Cost Item Mini SD card Unit Costs 3 Direct materials: $0.05 /mm 0.10 lunit 0.50 lunit 4 Specialty polymer 17 mm Connector pins 10 units Wi-Fi transreceiver 1 unit Direct manufacturing labor: Setup Fabrication 1 min. 2 min. 24.00 /hr. 30.00 /hr. 10 Phoebe King, the CEO, is disappointed with the results for June 2017, especially in comparison to her expec- tations based on the standard cost data. Home Insert Page Layout Formulas Data Review View 13 Performance Report, June 2017 Actual Budget Variance 14 15 Output units 16 Revenues 17 Direct materials 18 Direct manufacturing labor 462,000 420,000 42,000 $266,700 $3,626,700 1,200,000 $3,360,000 987,000 213,000 628,400 588,000 40,400 2. 6. King observes that despite the significant increase in the output of Mini SDs in June, the product's contribu- tion to the company's profitability has been lower than expected. She gathers the following information to help analyze the situation: Home Insert Page Layout Formulas Data Review View 21 Input Usage Report, June 2017 22 Cost Item Quantity Actual Cost 23 Direct materials: Specialty polymer Connector pins Wi-Fi transreceiver 24 8,300,000 mm $415,000 5,000,000 units 550,000 235,000 25 26 470,000 units 27 28 Direct manufacturing labor: Setup 455,000 min. 182,000 29 30 Fabrication 864,000 min. 446,400 Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another: 1. Selling-price variance 2. Direct materials price variance, for each category of materials 3. Direct materials efficiency variance, for each category of materials 4. Direct manufacturing labor price variance, for setup and fabrication 5. Direct manufacturing labor efficiency variance, for setup and fabrication Required

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Direct-cost and selling price variances. MicroDisk is the market leader in the Secure Digital (SD) card industry and sells memory cards for use in portable devices such as mobile phones, tablets, and digital cameras. Its most popular card is the Mini SD, which it sells through outlets such as Target and Walmart for an average selling price of $8. MicroDisk has a standard monthly production level of 420,000 Mini SDs in its Taiwan facility. The standard input quantities and prices for direct-cost inputs are as follows:

Home Insert Page Layout Formulas Data Review View A Quantity per Standard Cost Item Mini SD card Unit Costs 3 Direct materials: $0.05 /mm 0.10 lunit 0.50 lunit 4 Specialty polymer 17 mm Connector pins 10 units Wi-Fi transreceiver 1 unit Direct manufacturing labor: Setup Fabrication 1 min. 2 min. 24.00 /hr. 30.00 /hr. 10 Phoebe King, the CEO, is disappointed with the results for June 2017, especially in comparison to her expec- tations based on the standard cost data. Home Insert Page Layout Formulas Data Review View 13 Performance Report, June 2017 Actual Budget Variance 14 15 Output units 16 Revenues 17 Direct materials 18 Direct manufacturing labor 462,000 420,000 42,000 $266,700 $3,626,700 1,200,000 $3,360,000 987,000 213,000 628,400 588,000 40,400 2. 6.
Transcribed Image Text:Home Insert Page Layout Formulas Data Review View A Quantity per Standard Cost Item Mini SD card Unit Costs 3 Direct materials: $0.05 /mm 0.10 lunit 0.50 lunit 4 Specialty polymer 17 mm Connector pins 10 units Wi-Fi transreceiver 1 unit Direct manufacturing labor: Setup Fabrication 1 min. 2 min. 24.00 /hr. 30.00 /hr. 10 Phoebe King, the CEO, is disappointed with the results for June 2017, especially in comparison to her expec- tations based on the standard cost data. Home Insert Page Layout Formulas Data Review View 13 Performance Report, June 2017 Actual Budget Variance 14 15 Output units 16 Revenues 17 Direct materials 18 Direct manufacturing labor 462,000 420,000 42,000 $266,700 $3,626,700 1,200,000 $3,360,000 987,000 213,000 628,400 588,000 40,400 2. 6.
King observes that despite the significant increase in the output of Mini SDs in June, the product's contribu- tion to the company's profitability has been lower than expected. She gathers the following information to help analyze the situation: Home Insert Page Layout Formulas Data Review View 21 Input Usage Report, June 2017 22 Cost Item Quantity Actual Cost 23 Direct materials: Specialty polymer Connector pins Wi-Fi transreceiver 24 8,300,000 mm $415,000 5,000,000 units 550,000 235,000 25 26 470,000 units 27 28 Direct manufacturing labor: Setup 455,000 min. 182,000 29 30 Fabrication 864,000 min. 446,400 Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another: 1. Selling-price variance 2. Direct materials price variance, for each category of materials 3. Direct materials efficiency variance, for each category of materials 4. Direct manufacturing labor price variance, for setup and fabrication 5. Direct manufacturing labor efficiency variance, for setup and fabrication Required
Transcribed Image Text:King observes that despite the significant increase in the output of Mini SDs in June, the product's contribu- tion to the company's profitability has been lower than expected. She gathers the following information to help analyze the situation: Home Insert Page Layout Formulas Data Review View 21 Input Usage Report, June 2017 22 Cost Item Quantity Actual Cost 23 Direct materials: Specialty polymer Connector pins Wi-Fi transreceiver 24 8,300,000 mm $415,000 5,000,000 units 550,000 235,000 25 26 470,000 units 27 28 Direct manufacturing labor: Setup 455,000 min. 182,000 29 30 Fabrication 864,000 min. 446,400 Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another: 1. Selling-price variance 2. Direct materials price variance, for each category of materials 3. Direct materials efficiency variance, for each category of materials 4. Direct manufacturing labor price variance, for setup and fabrication 5. Direct manufacturing labor efficiency variance, for setup and fabrication Required
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