Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 9, Problem 39P
As part of its cost control program, Tracer Company uses a
The following direct labor standard was established for one of Tracer’s products, effective June 1, 2012, the beginning of the fiscal year:
The standard was based on the direct labor being performed by a team consisting of five persons with Assembler A skills, three persons with Assembler B skills, and two persons with machinist skills; this team represents the most efficient use of the company’s skilled employees. The standard also assumed that the quality of direct materials that had been used in prior years would be available for the coming year.
For the first seven months of the fiscal year, actual
Furthermore, Tracer has been notified by its direct materials supplier that lower-quality direct materials will be supplied beginning January 1. Normally, one unit of direct materials is required for each good unit produced, and no units are lost due to defective direct materials. Tracer estimates that 6 percent of the units manufactured after January 1 will be rejected in the final inspection process due to defective direct materials.
Required:
- 1. Determine the number of units of lower quality direct materials that Tracer Company must enter into production in order to produce 47,000 good finished units.
- 2. How many hours of each class of direct labor must be used to manufacture 47,000 good finished units?
- 3. Determine the amount that should be included in Tracer’s January operating budget for the planned direct labor variance caused by the reorganization of the direct labor teams and the lower quality direct materials. (CMA adapted)
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As part of its cost control program, Tracer Companyuses a standard costing system for all manufactureditems. The standard cost for each item is established atthe beginning of the fiscal year, and the standards are not revised until thebeginning of the next fiscal year. Changes in costs, caused during the year bychanges in direct materials or direct labor inputs or by changes in themanufacturing process, are recognized as they occur by the inclusion ofplanned variances in Tracer's monthly operating budgets.The following direct labor standard was established for one of Tracer'sproducts, effective June 1, 2012, the beginning of the fiscal year:
Assembler A labor (5 hrs @ $10) $50
Assembler B labor (3 hrs @$11) 33
Machinist labor (2 hrs @$15) 30
Standard cost per 100 units $113
The standard was based on the direct labor being performed by a teamconsisting of five persons with Assembler A skills, three persons withAssembler B skills, and two persons with machinist skills; this team…
Please do not give solution in image format ?
Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are
purchased, and prorates all variances at year-end. Variances associated with direct materials are prorated based on the balances of
direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to
Finished Goods Inventory and to Cost of Goods Sold (COGS) on the basis of the relative direct labor cost in these accounts at year-
end.
The following information is for the year ended December 31:
The company had no beginning inventories and no ending Work-in-Process (WIP) Inventory. It applies manufacturing overhead at 80%
of standard direct labor cost.
Finished goods inventory at 12/31:
Direct materials
Direct labor
Applied manufacturing overhead
Direct materials inventory at 12/31
Cost of goods sold for the year ended 12/31:
Direct materials
Direct labor
Applied manufacturing overhead
Direct materials…
Chapter 9 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 9 - Discuss the difference between budgets and...Ch. 9 - What is the quantity decision? The pricing...Ch. 9 - Why is historical experience often a poor basis...Ch. 9 - Prob. 4DQCh. 9 - How does standard costing improve the control...Ch. 9 - The budget variance for variable production costs...Ch. 9 - Explain why the direct materials price variance is...Ch. 9 - The direct materials usage variance is always the...Ch. 9 - The direct labor rate variance is never...Ch. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - What is the cause of an unfavorable volume...Ch. 9 - Prob. 13DQCh. 9 - Explain how the two-, three-, and four-variance...Ch. 9 - Prob. 15DQCh. 9 - Prob. 1CECh. 9 - Direct Materials Usage Variance Refer to...Ch. 9 - Refer to Cornerstone Exercise 9.1. Guillermos Oil...Ch. 9 - Kavallia Company set a standard cost for one item...Ch. 9 - Yohan Company has the following balances in its...Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Variances Refer to Cornerstone Exercise 9.6....Ch. 9 - Standish Company manufactures consumer products...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Mangia Pizza Company makes frozen pizzas that are...Ch. 9 - Refer to Cornerstone Exercise 9.9. Required: 1....Ch. 9 - Quincy Farms is a producer of items made from farm...Ch. 9 - During the year, Dorner Company produced 280,000...Ch. 9 - Zoller Company produces a dark chocolate candy...Ch. 9 - Oerstman, Inc., uses a standard costing system and...Ch. 9 - Refer to the data in Exercise 9.15. Required: 1....Ch. 9 - Chypre, Inc., produces a cologne mist using a...Ch. 9 - Refer to Exercise 9.17. Chypre, Inc., purchased...Ch. 9 - Delano Company uses two types of direct labor for...Ch. 9 - Jameson Company produces paper towels. The company...Ch. 9 - Madison Company uses the following rule to...Ch. 9 - Laughlin, Inc., uses a standard costing system....Ch. 9 - Responsibility for the materials price variance...Ch. 9 - Which of the following is true concerning labor...Ch. 9 - A company uses a standard costing system. At the...Ch. 9 - Relevant information for direct labor is as...Ch. 9 - Which of the following is the most likely...Ch. 9 - Haversham Corporation produces dress shirts. The...Ch. 9 - Plimpton Company produces countertop ovens....Ch. 9 - Algers Company produces dry fertilizer. At the...Ch. 9 - Misterio Company uses a standard costing system....Ch. 9 - Petrillo Company produces engine parts for large...Ch. 9 - Business Specialty, Inc., manufactures two...Ch. 9 - Vet-Pro, Inc., produces a veterinary grade...Ch. 9 - Refer to the data in Problem 9.34. Vet-Pro, Inc.,...Ch. 9 - Energy Products Company produces a gasoline...Ch. 9 - Nuevo Company produces a single product. Nuevo...Ch. 9 - Ingles Company manufactures external hard drives....Ch. 9 - As part of its cost control program, Tracer...Ch. 9 - Aspen Medical Laboratory performs comprehensive...Ch. 9 - Leather Works is a family-owned maker of leather...
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