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 Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 2.0 kilos 1.5 liters 0.10 hours 0.80 hours Zeta7 3.0 kilos 2.5 liters 0.45 hours 0.90 hours Information relating to materials purchased and materials used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 14,800 kilos $66,600 $4.30 per kilo 9,300 kilos Y661 15,800 liters $23,700 $1.60 per liter 13,800 liters The following additional information is available: The company recognizes price variances when materials are purchased. The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing. During May, 1,220 direct labor-hours were worked in Sintering at a total labor cost of $28,060, and 2,930 direct labor-hours were worked in Finishing at a total labor cost of $67,390. Production during May was 2,300 Alpha6s and 1,600 Zeta7s. requied: Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.) Standard Quantity or Hours Standard Price or Rate Standard Cost Alpha6: Direct materials-X442 kilos per kilo Direct materials-Y661 liters per liter Direct labor-Sintering hours per hour Direct labor-Finishing hours per hour Total $0.00 Zeta7: Direct materials-X442 kilos per kilo Direct materials-Y661 liters per liter Direct labor-Sintering hours per hour Direct labor-Finishing hours per hour Total $0.00 Compute the materials price and quantity variances for each material. (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.) Direct Materials Variances—Material X442: Materials price variance Materials quantity variance Direct Materials Variances—Material Y661: Materials price variance Materials quantity variance Compute the labor rate and efficiency variances for each operation. (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.) Direct Labor Variances—Sintering: Labor rate variance Labor efficiency variance Direct Labor Variances—Finishing: Labor rate variance Labor efficiency variance
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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
| Raw Material | Standard Labor Time | ||||
| Product | X442 | Y661 | Sintering | Finishing | |
| Alpha6 | 2.0 kilos | 1.5 liters | 0.10 hours | 0.80 hours | |
| Zeta7 | 3.0 kilos | 2.5 liters | 0.45 hours | 0.90 hours | |
Information relating to materials purchased and materials used in production during May follows:
| Material | Purchases | Purchase Cost | Standard Price |
Used in Production |
|||
| X442 | 14,800 | kilos | $66,600 | $4.30 | per kilo | 9,300 | kilos |
| Y661 | 15,800 | liters | $23,700 | $1.60 | per liter | 13,800 | liters |
The following additional information is available:
- The company recognizes price variances when materials are purchased.
-
The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing.
-
During May, 1,220 direct labor-hours were worked in Sintering at a total labor cost of $28,060, and 2,930 direct labor-hours were worked in Finishing at a total labor cost of $67,390.
-
Production during May was 2,300 Alpha6s and 1,600 Zeta7s.
requied:
Complete the standard cost card for each product, showing the standard cost of direct materials and direct labor. (Round your answers to 2 decimal places.)
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Compute the materials price and quantity variances for each material. (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.)
Compute the labor rate and efficiency variances for each operation. (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.)
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