None Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each ofthe products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards foreach product (on a per unit basis):Raw MaterialProductAlpha6Zeta7X4422.5 kilos4.5 kilosY6612.5 litersStandard Labor TimeSintering5.0 liters0.10 hours0.30 hoursFinishing1.00 hours1.20 hoursInformation relating to materials purchased and materials used in production during May follows:MaterialX442Y661PurchasesPurchase Cost15,200 kilos16,200 liters$ 42,560$ 24,300Standard Price$ 2.60 per kilo$ 1.60 per literUsed in Production9,700 kilos14,200 litersThe 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 $21.00 per hour in Finishing.c. During May, 1,320 direct labor-hours were worked in Sintering at a total labor cost of $31,680, and 2,970 direct labor-hours wereworked in Finishing at a total labor cost of $68,310.d. Production during May was 1,800 Alpha6s and 1,200 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.

Material price variance It is the difference between the budgeted material costs and how much that…

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 2.5 kilos Y661 2.5 liters 4.5 kilos 5.0 liters Standard Labor Time Sintering 0.10 hours 0.30 hours Finishing 1.00 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Material X442 Y661 Purchases 15,200 kilos 16,200 liters Purchase Cost $ 42,560 Standard Price $ 2.60 per kilo Used in Production $ 24,300 $ 1.60 per liter 9,700 kilos 14,200 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 $21.00 per hour in Finishing. c. During May, 1,320 direct labor-hours were worked in Sintering at a total labor cost of $31,680, and 2,970 direct labor-hours were worked in Finishing at a total labor cost of $68,310. d. Production during May was 1,800 Alpha6s and 1,200 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.

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PA: Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of...