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): Product Alpha6 Zeta7 Raw Material X442 3.0 kilos 5.0 kilos Y661 2.0 liters Standard Labor Time Sintering Finishing 0.30 hours 1.20 hours 4.0 liters 0.40 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Purchase Cost Material Purchases X442 14,900 kilos $ 37,250 Standard Price $ 2.30 per kilo Y661 15,900 liters $ 19,080 $ 1.30 per liter The following additional information is available: Used in Production 9,400 kilos 13,900 liters a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $23.00 per hour in Sintering and $19.50 per hour in Finishing. c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $29, 200, and 2,940 direct labor-hours were worked in Finishing at a total labor cost of $63,210. d. Production during May was 1,500 Alpha6s and 1,000 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.
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): Product Alpha6 Zeta7 Raw Material X442 3.0 kilos 5.0 kilos Y661 2.0 liters Standard Labor Time Sintering Finishing 0.30 hours 1.20 hours 4.0 liters 0.40 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Purchase Cost Material Purchases X442 14,900 kilos $ 37,250 Standard Price $ 2.30 per kilo Y661 15,900 liters $ 19,080 $ 1.30 per liter The following additional information is available: Used in Production 9,400 kilos 13,900 liters a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $23.00 per hour in Sintering and $19.50 per hour in Finishing. c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $29, 200, and 2,940 direct labor-hours were worked in Finishing at a total labor cost of $63,210. d. Production during May was 1,500 Alpha6s and 1,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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):
Product
Alpha6
Zeta7
Raw Material
X442
3.0 kilos
5.0 kilos
Y661
2.0 liters
Standard Labor Time
Sintering
Finishing
0.30 hours
1.20 hours
4.0 liters
0.40 hours
1.20 hours
Information relating to materials purchased and materials used in production during May follows:
Purchase
Cost
Material
Purchases
X442
14,900 kilos
$ 37,250
Standard Price
$ 2.30 per kilo
Y661
15,900 liters
$ 19,080
$ 1.30 per liter
The following additional information is available:
Used in
Production
9,400 kilos
13,900 liters
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is $23.00 per hour in Sintering and $19.50 per hour in Finishing.
c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $29, 200, and 2,940 direct labor-hours were
worked in Finishing at a total labor cost of $63,210.
d. Production during May was 1,500 Alpha6s and 1,000 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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