Raytherm makes heat shrinkable tubing for the electronics industry. The following standards have been developed by the industrial engineering department of Raytherm for 1/4 inch heat shrinkable tubing: Raw Material Standard: Irradiated polyethylene plastic: .1 ounces per foot of tubing at 5 cents per ounce ($.80 per pound). Direct Labor Standard: .001 hours per foot at $25 per hour including benefits. During the month 900,000 feet of tubing was produced and the following costs were incurred: Actual raw material purchased: 12,250lbs (196,000oz) for a total cost of $9,500. Actual raw material used; 6,225 lbs (99,600oz) Actual direct labor incurred: Direct labor hours incurred: 980 Total payroll cost including benefits: $26,700 Required: Use the following equations to calculate the following variances: PPV (AP-SP)AQP MUV=(AQ-SQ)SP LRV=(AR-SR)AH+ LEV=(AH-SH)SR B STANDARD COST MATL. 5 SP SQA 0.05 0.1 PER FOOT 6 7 8 DIR LABOR SR SHA 96 9 25.00 0.001 11 ACTUAL TOTAL COST AMT PURCH. 12 Plastic $ 13 9,500 9,500.00 196,000 AMT USED 90,000 14 AMT USED 15 99,600 16 17 TOTAL COST HRS WK 18 Dir. Labor $ 26,700 980 19 26 MUV 29 LRV 32 LEV 21 TOTAL UNTS 23 PPV 24 222222222232233 900,000 (AP AQP) -(SP AQP) VAR 5 (AQU SP) (SQA SP) VAR 5 (AR*AH) (SR*AH) VAR 5 LO (AH*SR) (SHA*SR) VAR + 5

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Chapter1: Financial Statements And Business Decisions
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Raytherm makes heat shrinkable tubing for the electronics industry. The
following standards have been developed by the industrial engineering
department of Raytherm for 1/4 inch heat shrinkable tubing:
Raw Material Standard:
Irradiated polyethylene plastic: .1 ounces per foot of tubing at 5 cents per
ounce ($.80 per pound).
Direct Labor Standard:
.001 hours per foot at $25 per hour including benefits.
During the month 900,000 feet of tubing was produced and the following costs
were incurred:
Actual raw material purchased:
12,250lbs (196,000oz) for a total cost of $9,500.
Actual raw material used;
6,225 lbs (99,600oz)
Actual direct labor incurred:
Direct labor hours incurred: 980
Total payroll cost including benefits: $26,700
Required:
Use the following equations to calculate the following variances:
PPV (AP-SP)AQP
MUV=(AQ-SQ)SP
LRV=(AR-SR)AH+
LEV=(AH-SH)SR
Transcribed Image Text:Raytherm makes heat shrinkable tubing for the electronics industry. The following standards have been developed by the industrial engineering department of Raytherm for 1/4 inch heat shrinkable tubing: Raw Material Standard: Irradiated polyethylene plastic: .1 ounces per foot of tubing at 5 cents per ounce ($.80 per pound). Direct Labor Standard: .001 hours per foot at $25 per hour including benefits. During the month 900,000 feet of tubing was produced and the following costs were incurred: Actual raw material purchased: 12,250lbs (196,000oz) for a total cost of $9,500. Actual raw material used; 6,225 lbs (99,600oz) Actual direct labor incurred: Direct labor hours incurred: 980 Total payroll cost including benefits: $26,700 Required: Use the following equations to calculate the following variances: PPV (AP-SP)AQP MUV=(AQ-SQ)SP LRV=(AR-SR)AH+ LEV=(AH-SH)SR
B STANDARD COST
MATL.
5
SP
SQA
0.05
0.1
PER FOOT
6
7
8 DIR LABOR
SR
SHA
96
9
25.00
0.001
11 ACTUAL
TOTAL COST
AMT PURCH.
12 Plastic
$
13
9,500
9,500.00
196,000
AMT USED
90,000
14
AMT USED
15
99,600
16
17
TOTAL COST
HRS WK
18 Dir. Labor
$
26,700
980
19
26 MUV
29 LRV
32 LEV
21 TOTAL UNTS
23 PPV
24
222222222232233
900,000
(AP AQP)
-(SP AQP)
VAR
5
(AQU SP)
(SQA SP)
VAR
5
(AR*AH)
(SR*AH)
VAR
5
LO
(AH*SR)
(SHA*SR)
VAR
+
5
Transcribed Image Text:B STANDARD COST MATL. 5 SP SQA 0.05 0.1 PER FOOT 6 7 8 DIR LABOR SR SHA 96 9 25.00 0.001 11 ACTUAL TOTAL COST AMT PURCH. 12 Plastic $ 13 9,500 9,500.00 196,000 AMT USED 90,000 14 AMT USED 15 99,600 16 17 TOTAL COST HRS WK 18 Dir. Labor $ 26,700 980 19 26 MUV 29 LRV 32 LEV 21 TOTAL UNTS 23 PPV 24 222222222232233 900,000 (AP AQP) -(SP AQP) VAR 5 (AQU SP) (SQA SP) VAR 5 (AR*AH) (SR*AH) VAR 5 LO (AH*SR) (SHA*SR) VAR + 5
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