Chapter 10, Problem 33BEB

Control Limits

During the last 6 weeks, the actual costs of labor for Solsana Company were as follows:

The standard materials cost for each week was $40,000 with an allowable deviation of ±5,000.

Required:

Plot the actual costs over time against the upper and lower limits. Comment on whether or not there is a need to investigate any of the variances.

Use the following information to complete Brief Exercises 10-34 and 10-35:

Young Inc. produces plastic bottles. Production of 16-ounce bottles has a standard unit quantity of 0.45 ounce of plastic per bottle. During the month of June, 240,000 bottles were produced using 110,000 ounces of plastic. The actual cost of plastic was $0,042 per ounce, and the standard price was $0,045 per ounce. There is no beginning or ending inventories of plastic.