Question #2 Gloria's a food manufacturer is trying to make an assessment of its operations for the past year. The entity operates a standard marginal costing system and manufactures one product, the blaster for which the following standard revenue and cost data per unit of product is available: Selling price Direct material A $24.00 2.5 kg at $3.40 per kg 1.5 kg at $2.40 per kg 0.45 hrs. at $12.00 per hour Direct material B Direct labour Actual data for the twelve-month period was as follows: Sales and production 48,000 units of the blaster were produced and sold for $1,161,600 Direct material A Direct material B 121,950 kg were used at a cost of $402,435 67,200 kg were used at a cost of $168,000 Employees worked for 18,900 hours, but 19,200 hours were paid at a cost of $234,240 Direct labour Budgeted sales for the period were 50,000 units of Product Blaster. A recession last year meant that the market for the product declined by 5%. Required: (a) Calculate the following variances. (i) Sales volume variance. (ii) Planning and operational variances for sales volume. (iii) Price, mix and yield variances for each material. (b) Suggest two possible explanations for the material price and yield variances calculated in part (a).
Question #2 Gloria's a food manufacturer is trying to make an assessment of its operations for the past year. The entity operates a standard marginal costing system and manufactures one product, the blaster for which the following standard revenue and cost data per unit of product is available: Selling price Direct material A $24.00 2.5 kg at $3.40 per kg 1.5 kg at $2.40 per kg 0.45 hrs. at $12.00 per hour Direct material B Direct labour Actual data for the twelve-month period was as follows: Sales and production 48,000 units of the blaster were produced and sold for $1,161,600 Direct material A Direct material B 121,950 kg were used at a cost of $402,435 67,200 kg were used at a cost of $168,000 Employees worked for 18,900 hours, but 19,200 hours were paid at a cost of $234,240 Direct labour Budgeted sales for the period were 50,000 units of Product Blaster. A recession last year meant that the market for the product declined by 5%. Required: (a) Calculate the following variances. (i) Sales volume variance. (ii) Planning and operational variances for sales volume. (iii) Price, mix and yield variances for each material. (b) Suggest two possible explanations for the material price and yield variances calculated in part (a).
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...
Related questions
Question
Please help me
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning