ACCT 241 Week 10 Assignment Help 3 | American University
- american-university / ACCT 241
- 09 Aug 2019
- Price: $10
- Other / Other
ACCT 241 Week 10 Assignment Help 3 | American University
1.
Marvel
Parts, Inc., manufactures auto accessories. One of the company’s products is a
set of seat covers that can be adjusted to fit nearly any small car. The
company uses a standard cost system for all of its products. According to the
standards that have been set for the seat covers, the factory should work 2,850
hours each month to produce 1,900 sets of covers. The standard costs associated
with this level of production are:
|
|
Total |
Per
Set |
|||
|
Direct
materials |
$ |
42,560 |
$ |
22.40 |
|
|
Direct
labor |
$ |
51,300 |
|
27.00 |
|
|
Variable
manufacturing overhead (based on direct labor-hours) |
$ |
6,840 |
|
3.60 |
|
|
|
|
|
$ |
53.00 |
|
|
|
|||||
During
August, the factory worked only 2,800 direct labor-hours and produced 2,000
sets of covers. The following actual costs were recorded during the month:
|
|
Total |
Per
Set |
|||
|
Direct
materials (12,000 yards) |
$ |
45,600 |
$ |
22.80 |
|
|
Direct
labor |
$ |
49,000 |
|
24.50 |
|
|
Variable
manufacturing overhead |
$ |
7,000 |
|
3.50 |
|
|
|
|
|
$ |
50.80 |
|
|
|
|||||
At
standard, each set of covers should require 5.6 yards of material. All of the
materials purchased during the month were used in production.
Required:
1.
Compute the materials price and quantity variances for August.
2.
Compute the labor rate and efficiency variances for August.
3.
Compute the variable overhead rate and efficiency variances for August.
2.
Becton
Labs, Inc., produces various chemical compounds for industrial use. One
compound, called Fludex, is prepared using an elaborate distilling process. The
company has developed standard costs for one unit of Fludex, as follows:
|
|
Standard
Quantity |
Standard
Price |
Standard
Cost |
||||
|
Direct
materials |
2.5 |
ounces |
$ |
20.00 |
per
ounce |
$ |
50.00 |
|
Direct
labor |
1.4 |
hours |
$ |
22.50 |
per
hour |
|
31.50 |
|
Variable
manufacturing overhead |
1.4 |
hours |
$ |
3.50 |
per
hour |
|
4.90 |
|
Total
standard cost per unit |
|
|
|
|
|
$ |
86.40 |
|
|
|||||||
During
November, the following activity was recorded related to the production of
Fludex:
- Materials
purchased, 12,000 ounces at a cost of $225,000.
- There
was no beginning inventory of materials; however, at the end of the month,
2,500 ounces of material remained in ending inventory.
- The
company employs 35 lab technicians to work on the production of Fludex.
During November, they each worked an average of 160 hours at an average
pay rate of $22 per hour.
- Variable
manufacturing overhead is assigned to Fludex on the basis of direct
labor-hours. Variable manufacturing overhead costs during November totaled
$18,200.
- During
November, the company produced 3,750 units of Fludex.
Required:
1.
For direct materials:
a.
Compute the price and quantity variances.
b.
The materials were purchased from a new supplier who is anxious to enter into a
long-term purchase contract. Would you recommend that the company sign the
contract?
2.
For direct labor:
a.
Compute the rate and efficiency variances.
b.
In the past, the 35 technicians employed in the production of Fludex consisted
of 20 senior technicians and 15 assistants. During November, the company
experimented with fewer senior technicians and more assistants in order to
reduce labor costs. Would you recommend that the new labor mix be continued?
3.
Compute the variable overhead rate and efficiency variances.
USA 
India