MacGyver Corporation manufactures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in six-gallon drums. Two raw materials are used; these are referred to by people in the business as A and B. Two types of labor are required also. These are mixers (labor class I) and packers (labor class II). You were recently hired by the company president, Pete Thorn, to be the controller. You soon learned that MacGyver uses a standard-costing system. Vari-ances are computed and closed into Cost of Goods Sold monthly. After your first month on the job, you gathered the necessary data to compute the month’s variances for direct material and direct labor. You finished everything up by 5:00 p.m. on the 31st, including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presenta-tion to Thorn first thing in the morning. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way.You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it though, you knocked over the Miracle Goo as you rose from the kitchen table. The stuff splattered everywhere, and, most unfortunately, obliterated most of your notes. All that remained legible is the following information" "Other assorted data gleaned from your notes:• The standards for each drum of Miracle Goo include 10 pounds of material A at a standard price of $5 per pound.• The standard cost of material B is $15 for each drum of Miracle Goo.• Purchases of material A were 12,000 pounds at $4.50 per pound.• Given the actual output for the month, the standard allowed quantity of material A was 10,000 pounds. The standard allowed quantity of material B was 5,000 gallons.• Although 6,000 gallons of B were purchased, only 4,800 gallons were used.• The standard wage rate for mixers is $15 per hour. The standard labor cost per drum of product for mixers is $30 per drum.• The standards allow 4 hours of direct labor II (packers) per drum of Miracle Goo. The standard labor cost per drum of product for packers is $48 per drum.• Packers were paid $11.90 per hour during the month.You happened to remember two additional facts. There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to direct-material purchases only. Required: Now you’ve got a major problem. Somehow you’ve got to reconstruct all the missing data in order to be ready for your meeting with the president. You start by making the following list of the facts you want to use in your presentation. Before getting down to business, you need a brief walk to clear your head. Out to the trash you go, and toss the remaining Miracle Goo." "Fill in the missing amounts in the list, using the available facts. Actual output (in drums): Direct material: A B Standard quantity per drum: Standard price: Standard cost per drum: Standard quantity allowed, given actual output: Actual quantity purchased: Actual price: Actual quantity used: Purchase price variance: Quantity variance: Direct labor: I (mixers) II (packers) Standard hours per drum: Standard rate per hour: Standard cost per drum: Standard quantity allowed, given actual output: Actual rate per hour: Actual hours: Rate variance: variance: Total of all variances for the month:"

MacGyver Corporation manufactures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in six-gallon drums. Two raw materials are used; these are referred to by people in the business as A and B. Two types of labor are required also. These are mixers (labor class I) and packers (labor class II). You were recently hired by the company president, Pete Thorn, to be the controller. You soon learned that MacGyver uses a standard-costing system. Vari-ances are computed and closed into Cost of Goods Sold monthly. After your first month on the job, you gathered the necessary data to compute the month’s variances for direct material and direct labor. You finished everything up by 5:00 p.m. on the 31st, including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presenta-tion to Thorn first thing in the morning. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way.You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it though, you knocked over the Miracle Goo as you rose from the kitchen table. The stuff splattered everywhere, and, most unfortunately, obliterated most of your notes. All that remained legible is the following information" "Other assorted data gleaned from your notes:• The standards for each drum of Miracle Goo include 10 pounds of material A at a standard price of $5 per pound.• The standard cost of material B is $15 for each drum of Miracle Goo.• Purchases of material A were 12,000 pounds at $4.50 per pound.• Given the actual output for the month, the standard allowed quantity of material A was 10,000 pounds. The standard allowed quantity of material B was 5,000 gallons.• Although 6,000 gallons of B were purchased, only 4,800 gallons were used.• The standard wage rate for mixers is $15 per hour. The standard labor cost per drum of product for mixers is $30 per drum.• The standards allow 4 hours of direct labor II (packers) per drum of Miracle Goo. The standard labor cost per drum of product for packers is $48 per drum.• Packers were paid $11.90 per hour during the month.You happened to remember two additional facts. There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to direct-material purchases only. Required: Now you’ve got a major problem. Somehow you’ve got to reconstruct all the missing data in order to be ready for your meeting with the president. You start by making the following list of the facts you want to use in your presentation. Before getting down to business, you need a brief walk to clear your head. Out to the trash you go, and toss the remaining Miracle Goo." "Fill in the missing amounts in the list, using the available facts. Actual output (in drums): Direct material: A B Standard quantity per drum: Standard price: Standard cost per drum: Standard quantity allowed, given actual output: Actual quantity purchased: Actual price: Actual quantity used: Purchase price variance: Quantity variance: Direct labor: I (mixers) II (packers) Standard hours per drum: Standard rate per hour: Standard cost per drum: Standard quantity allowed, given actual output: Actual rate per hour: Actual hours: Rate variance: variance: Total of all variances for the month:"

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

"MacGyver Corporation manufactures a product called Miracle Goo, which comes in handy for just about anything. The thick tarry substance is sold in six-gallon drums. Two raw materials are used; these are referred to by people in the business as A and B. Two types of labor are required also. These are mixers (labor class I) and packers (labor class II). You were recently hired by the company president, Pete Thorn, to be the controller. You soon learned that MacGyver uses a standard-costing system. Vari-ances are computed and closed into Cost of Goods Sold monthly. After your first month on the job, you gathered the necessary data to compute the month’s variances for direct material and direct labor. You finished everything up by 5:00 p.m. on the 31st, including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presenta-tion to Thorn first thing in the morning. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way.You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it though, you knocked over the Miracle Goo as you rose from the kitchen table. The stuff splattered everywhere, and, most unfortunately, obliterated most of your notes. All that remained legible is the following information"

"Other assorted data gleaned from your notes:• The standards for each drum of Miracle Goo include 10 pounds of material A at a standard price of $5 per pound.• The standard cost of material B is $15 for each drum of Miracle Goo.• Purchases of material A were 12,000 pounds at $4.50 per pound.• Given the actual output for the month, the standard allowed quantity of material A was 10,000 pounds. The standard allowed quantity of material B was 5,000 gallons.• Although 6,000 gallons of B were purchased, only 4,800 gallons were used.• The standard wage rate for mixers is $15 per hour. The standard labor cost per drum of product for mixers is $30 per drum.• The standards allow 4 hours of direct labor II (packers) per drum of Miracle Goo. The standard labor cost per drum of product for packers is $48 per drum.• Packers were paid $11.90 per hour during the month.You happened to remember two additional facts. There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to direct-material purchases only.

Required:

Now you’ve got a major problem. Somehow you’ve got to reconstruct all the missing data in order to be ready for your meeting with the president. You start by making the following list of the facts you want to use in your presentation. Before getting down to business, you need a brief walk to clear your head. Out to the trash you go, and toss the remaining Miracle Goo."

"Fill in the missing amounts in the list, using the available facts.