Question

Problem 10-10 (Algo) Multiple Products, Materials, and Processes (LO10-1, LO10-2) Mickley Corporation produces two products, Alphabs 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) Product Alpha 6 Zeta Raw Material X442 Y661 1.5 kilos 2.0 liters 3.5 kilos 4.0 liters Standard Labor Time Sintering Finishing 0.20 hours 0.80 hours 0.40 hours 0.90 hours Information relating to materials purchased and materials used in production during May follows: Material X442 Y661 Purchase Purchases Cost 14,300 kilos $57,200 15,300 liters $24,489 Standard Price $3.80 per kilo $1.70 per Used in Production 8,800 kilos 13,300 liters The following additional information is available: a. The company recognizes price variances when materials are purchased, b. The standard labor rate is $20.00 per hour in Sintering and $18.50 per hour in Finishing. c. During May, 1,300 direct labor-hours were worked in Sintering at a total labor cost of $29,640, and 2,880 direct labor-hours were worked in Finishing at a total labor cost of $59,040. d. Production during May was 1,800 Alpha6s and 1,800 Zeta7s. Required: 1. Complete the 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

Answer 1

* Reqet Standoud ач of Ho3 Standoud Price Sandloud Oluate COSE Alpha: 2400 Diuect materials-X492 kilos $ 3.80 Pekno $10260 3600 lteu lo Deicet materials. Y 661 per liter $ 6120 360 Dilect labou-Sintering $7200 hours houn $20 peehr $18.50 pehr 1440 Diucat labou - Finishing $26,640 Tocal $50220 total Zetat: Direct material-x442 $ 23,940 $3.80 $1.70 kilos liters hours Perlulo per liter Diuret material Y661 6300 4200 720 1620 $12,240 Divcerlabowe-Sintering $20 | Pecar Puhr $14,400. $29,970 Dicer labou - Thishing hows $18:50 poral $ 80550 * Alpha 6 Standaid Quantity 8442 = 1800x1.5 2 200 kilos Y661 $ 1800 20 $ 8600 liter Standoud labou hocu Sintering - 1800 x 0 20 finishing = 1800x 0.80 360 hrs 1440 hrs

to Zetat Standoud Quantity X442 1800x 3.5 2 6300 kilos Y661 1800 x 402 7200 Kites letes Standoud Hous sintring = 1800x 0.40 2 Pinishing - 1800 x 0902 720hrs 1620ho * Req-at DM Voutances - Mocleval x442! Mateulat Ruce roana $ 2680 G Material Quantity Variana $760 To DM variance - Material Y661: Material Purce vaulance To $1630 $ 4250 Motwal Quantity louance. TE 1442 Motua pulice vuance ? ACHO Quandu xl Sidurc- Actual puice 14,300 (3180-4) 4442) 52860 (antauocable lateu'al Qty vouianu - Standard pure no (Standard Q_y Actual Q44) 2 $ 3.80* (9000 -8800) 2 $3.80x (200) $460 (mafavourable)

760) Matual Price voulance 15300x410-S160) 15800*($0.10) * $ 1580 (tauowabu Morcicit Qty variance $170*( 13300 - 10900) $1.70x (2500) . $4230 ( favouable) * Req-gt Diluce labou variance - Sintering tobou ua vowance $ 3640 $4400 labou efficiency variance D. L Vauances- Pinishing labow rate vavance $5760 $3830 labour efficiency vauiana Sintering! labow rate rauana Actual Hows (Std Jati - Actual vale = 1300x ($20-$22.8) 21300 ($2.8) $ 8640 (un lavourable) labou ehiaincy vavance: Stardid vatex Standad His - Actual hrs ) 2 $20x (1080-1300) 2 $20x (220) - $4400 Cantavouable)

Finishing labou wat vaulance = 2880 x $18.50 +2015) = 2880x (-$2) - $5460 (antawowable) labow ette'ciency vauiana = $1850x ( 8060 - 2860) - $18-50X (180) $3330 (favourable)