Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operat the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product Alpha6 Zeta7 X442 Y661 3.0 kilos 3.0 liters 5.0 kilos 5.0 liters Sintering 0.30 hours Finishing 1.10 hours 0.40 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Material X442 Y661 Purchases 15,300 kilos 16,300 liters Purchase Cost $ 44,370 $ 26,080 Standard Price $ 2.70 per kilo $ 1.70 per liter Used in Production 9,800 kilos 14,300 liters The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $23.00 per hour in Sintering and $21.50 per hour in Finishing. c. During May, 1,320 direct labor-hours were worked in Sintering at a total labor cost of $32,340, and 2,980 direct labor-hours were worked in Finishing at a total labor cost of $70,030. d. Production during May was 1,900 Alpha6s and 900 Zeta7s.
Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operat the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product Alpha6 Zeta7 X442 Y661 3.0 kilos 3.0 liters 5.0 kilos 5.0 liters Sintering 0.30 hours Finishing 1.10 hours 0.40 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Material X442 Y661 Purchases 15,300 kilos 16,300 liters Purchase Cost $ 44,370 $ 26,080 Standard Price $ 2.70 per kilo $ 1.70 per liter Used in Production 9,800 kilos 14,300 liters The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $23.00 per hour in Sintering and $21.50 per hour in Finishing. c. During May, 1,320 direct labor-hours were worked in Sintering at a total labor cost of $32,340, and 2,980 direct labor-hours were worked in Finishing at a total labor cost of $70,030. d. Production during May was 1,900 Alpha6s and 900 Zeta7s.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dineshbhai
Transcribed Image Text:Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of
the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for
each product (on a per unit basis):
Raw Material
Product
Alpha6
Zeta7
X442
Y661
D
3.0 kilos 3.0 liters
5.0 kilos 5.0 liters 0.40 hours
Standard
Sintering
0.30 hours
Labor Time
Finishing
1.10 hours
1.20 hours
Information relating to materials purchased and materials used in production during May follows:
Material
X442
Y661
Purchases
15,300 kilos
16,300 liters
Purchase Cost
$ 44,370
Standard Price
Used in Production
$ 2.70 per kilo
$ 26,080.
$ 1.70 per liter
9,800 kilos
14,300 liters
The following additional information is available:
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is $23.00 per hour in Sintering and $21.50 per hour in Finishing.
c. During May, 1,320 direct labor-hours were worked in Sintering at a total labor cost of $32,340, and 2,980 direct labor-hours were
worked in Finishing at a total labor cost of $70,030.
d. Production during May was 1,900 Alpha6s and 900 Zeta7s.
Required:
1. Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor.
2. Compute the materials price and quantity variances for each material.
3. Compute the labor rate and efficiency variances for each operation.
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