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 X442 Y661 Alpha6 2.5 Zeta7 4.5 Standard Labor Time Sintering Y661 16,200 kilos liters 0.30 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 15,200 kilos $ 42,560 $ 2.60 $ 24,300 $1.60 The following additional information is available: The company recognizes price variances when materials are purchased. The standard labor rate is $23.00 per hour in Sintering and $21.00 per hour in Finishing. 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. Production during May was 1,800 Alpha6s and 1,200 Zeta7s. Required: kilos Finishing 2.5 liters liters 0.10 hours. 1.00 hours 5.0 per kilo per liter 9,700 kilos 14,200 liters 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): Raw Material Product X442 Y661 Alpha6 2.5 Zeta7 4.5 Standard Labor Time Sintering Y661 16,200 kilos liters 0.30 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Material Purchases Purchase Cost Standard Price Used in Production X442 15,200 kilos $ 42,560 $ 2.60 $ 24,300 $1.60 The following additional information is available: The company recognizes price variances when materials are purchased. The standard labor rate is $23.00 per hour in Sintering and $21.00 per hour in Finishing. 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. Production during May was 1,800 Alpha6s and 1,200 Zeta7s. Required: kilos Finishing 2.5 liters liters 0.10 hours. 1.00 hours 5.0 per kilo per liter 9,700 kilos 14,200 liters 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):
Raw
Product
Material
X442 Y661
Alpha6 2.5
Zeta7 4.5
Standard
Labor Time
Sintering
Y661 16,200
liters 0.10 hours 1.00 hours.
liters 0.30 hours 1.20 hours
Information relating to materials purchased and materials used in production during May follows:
Material Purchases Purchase Cost Standard Price Used in Production
X442 15,200
kilos
$ 42,560
$ 2.60
$ 1.60
kilos
kilos
Finishing
2.5
liters
5.0
per kilo 9,700
per liter
kilos
$ 24,300
The following additional information is available:
The company recognizes price variances when materials are purchased.
The standard labor rate is $23.00 per hour in Sintering and $21.00 per hour in Finishing.
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.
Production during May was 1,800 Alpha6s and 1,200 Zeta7s.
Required:
14,200 liters
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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