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 standards for each product (on a per unit basis) are as follows: Raw Material Standard Labor Time Sintering Product Alpha6 Zeta7 X442 Y661 Finishing 3.0 kilos 2.5 liters 0.30 hours 1.20 hours 4.0 kilos 4.5 liters 0.30 hours 0.70 hours Information relating to materials purchased and used in production during May follows: Material X442 Y661 Purchases 15,600 kilos 16,600 liters Purchase Cost $ 49,920 $ 24,900 Standard Price $ 3.00 per kilo $ 1.60 per liter Used in Production 10,100 kilos 14,600 liters The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing. c. During May, 1,400 direct labor-hours were worked in Sintering at a total labor cost of $33,740, and 3,010 direct labor-hours were worked in Finishing at a total labor cost of $69,230. d. Production during May was 2,200 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 standards for each product (on a per unit basis) are as follows: Raw Material Standard Labor Time Sintering Product Alpha6 Zeta7 X442 Y661 Finishing 3.0 kilos 2.5 liters 0.30 hours 1.20 hours 4.0 kilos 4.5 liters 0.30 hours 0.70 hours Information relating to materials purchased and used in production during May follows: Material X442 Y661 Purchases 15,600 kilos 16,600 liters Purchase Cost $ 49,920 $ 24,900 Standard Price $ 3.00 per kilo $ 1.60 per liter Used in Production 10,100 kilos 14,600 liters The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing. c. During May, 1,400 direct labor-hours were worked in Sintering at a total labor cost of $33,740, and 3,010 direct labor-hours were worked in Finishing at a total labor cost of $69,230. d. Production during May was 2,200 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 standards for each product (on a per unit basis) are as follows:
Raw Material
Standard Labor Time
Sintering
Product
Alpha6
Zeta7
X442
Y661
Finishing
3.0 kilos 2.5 liters 0.30 hours 1.20 hours
4.0 kilos 4.5 liters 0.30 hours 0.70 hours
Information relating to materials purchased and used in production during May follows:
Material
X442
Y661
Purchases
15,600 kilos
16,600 liters
Purchase Cost
$ 49,920
$ 24,900
Standard Price
$ 3.00 per kilo
$ 1.60 per liter
Used in Production
10,100 kilos
14,600 liters
The following additional information is available:
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing.
c. During May, 1,400 direct labor-hours were worked in Sintering at a total labor cost of $33,740, and 3,010 direct labor-hours were
worked in Finishing at a total labor cost of $69,230.
d. Production during May was 2,200 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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