Raw Material Standard Labor Time Sintering 0.20 hours 0.35 hours X442 Y661 Finishing Product Alpha6..... 1.8 kilos 2.0 liters 4.5 liters 0.80 hours 0.90 hours 3.0 kilos Zeta7... Material Purchases 14,500 kilos 15,500 liters Purchase Cost Standard Price Used in Production X442 Y661 $52,200 $20,925 $3.50 per kilo $1.40 per liter 8,500 kilos 13,000 liters

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Multiple Products, Materials, and Processes

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):

The following additional information is available:

a. The company recognizes price variances when materials are purchased.

b. The standard labor rate is $19.80 per hour in Sintering and $19.20 per hour in Finishing.

c. During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,000, and 2,850 direct labor-hours were worked in Finishing at a total labor cost of $59,850.

d. Production during May was 1,500 Alpha6s and 2,000 Zeta 7s.

Required:

1. Prepare a 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.

Raw Material
Standard Labor Time
Sintering
0.20 hours
0.35 hours
X442
Y661
Finishing
Product
Alpha6.....
1.8 kilos
2.0 liters
4.5 liters
0.80 hours
0.90 hours
3.0 kilos
Zeta7...
Transcribed Image Text:Raw Material Standard Labor Time Sintering 0.20 hours 0.35 hours X442 Y661 Finishing Product Alpha6..... 1.8 kilos 2.0 liters 4.5 liters 0.80 hours 0.90 hours 3.0 kilos Zeta7...
Material
Purchases
14,500 kilos
15,500 liters
Purchase Cost Standard Price Used in Production
X442
Y661
$52,200
$20,925
$3.50 per kilo
$1.40 per liter
8,500 kilos
13,000 liters
Transcribed Image Text:Material Purchases 14,500 kilos 15,500 liters Purchase Cost Standard Price Used in Production X442 Y661 $52,200 $20,925 $3.50 per kilo $1.40 per liter 8,500 kilos 13,000 liters
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