Super Canned Air Co (SCAC) produces high pressure canned air products. The company expects to pay $8.50 per ounce for their raw materials. SCAC purchased 4,148 ounces of materials during the month of September for $6.90 per ounce. A standard of 2.30 ounces of material is expected to be used for each high pressure canned air product produced. Even though SCAC expected to produce 946 finished products, they actually produced 985 finished high pressure canned air products during the month of September and used 2,291.50 ounces of raw materials. Round your final answers to the nearest whole dollar/input code 0 Enter a favorable variance as a positive number (no sign needed) Enter an unfavorable variances as a negative number (minus sign in front of the digits) How much is the Price Variance? $ ● How much is the Quantity Variance? $

Super Canned Air Co (SCAC) produces high pressure canned air products. The company expects to pay $8.50 per ounce for their raw materials. SCAC purchased 4,148 ounces of materials during the month of September for $6.90 per ounce. A standard of 2.30 ounces of material is expected to be used for each high pressure canned air product produced. Even though SCAC expected to produce 946 finished products, they actually produced 985 finished high pressure canned air products during the month of September and used 2,291.50 ounces of raw materials. Round your final answers to the nearest whole dollar/input code 0 Enter a favorable variance as a positive number (no sign needed) Enter an unfavorable variances as a negative number (minus sign in front of the digits) How much is the Price Variance? $ ● How much is the Quantity Variance? $

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 3P: Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The...

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Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio and Maslimpio. Pocolimpio uses two quarts of the chemical for every unit produced, and Maslimpio uses five quarts. Currently, Taylor has 6,000 quarts of the material in inventory. All of the material is imported. For the coming year, Taylor plans to import 6,000 quarts to produce 1,000 units of Pocolimpio and 2,000 units of Maslimpio. The detail of each products unit contribution margin is as follows: Taylor Company has received word that the source of the material has been shut down by embargo. Consequently, the company will not be able to import the 6,000 quarts it planned to use in the coming years production. There is no other source of the material. Required: 1. Compute the total contribution margin that the company would earn if it could import the 6,000 quarts of the material. 2. Determine the optimal usage of the companys inventory of 6,000 quarts of the material. Compute the total contribution margin for the product mix that you recommend. 3. Assume that Pocolimpio uses three direct labor hours for every unit produced and that Maslimpio uses two hours. A total of 6,000 direct labor hours is available for the coming year. a. Formulate the linear programming problem faced by Taylor Company. To do so, you must derive mathematical expressions for the objective function and for the materials and labor constraints. b. Solve the linear programming problem using the graphical approach. c. Compute the total contribution margin produced by the optimal mix.
RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials price variations are not determined by usage but are charged to a materials price variation account at the time of purchase. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: *Due to plastic shortages, the company was forced to purchase lower-grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor, using the formulas on pages 421–422 and 424.
Sprocket Partners (SP) produces specialty sprocket products. The company expects to pay $12.20 per kilogram for their raw materials. SP purchased 4,257 kilograms of materials during the month of December for $13.20 per kilogram. A standard of 1.50 kilograms of material is expected to be used for each specialty sprocket product produced. Even though SP expected to produce 988 finished products, they actually produced 954 finished specialty sprocket products during the month of December and used 1,454.0 kilograms of raw materials. Round your final answers to the nearest whole dollar/input code 0 ● Enter a favorable variance as a positive number (no sign needed) ● Enter an unfavorable variances as a negative number (minus sign in front of the digits) How much is the Price Variance? $ How much is the Quantity Variance? $
Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: Standard Quantity Standard Price Direct materials 2.5 pounds $3 per pound Direct labor 0.6 hours $10 per hour During March 2022, the following activity was recorded by the company relating to the production of tybos: 1. The company produced 9,000 units during the month. 2. A total of 24,000 pounds of materials were purchased at a cost of $66,000. 3. A total of 24,000 pounds of materials were used in production. 4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000. Calculate the following variances for March for Riggins, Inc. Identify whether each variance is favorable or unfavorable.…
Johnson Electrical produces industrial ventilation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs direct material, $1,740,000, direct labor, $522,000, variable production overhead, $639,450, and fixed production overhead. $960,000. The $960,000 amount includes $84,000 of straight-line depreciation and $105,000 of supervisory salaries Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: Direct material Direct labor $ 554,600 159,300 Variable production overhead Depreciation 220,000 28,000 Supervisory salaries 37,600 Other fixed production overhead Total 252,000 $1,251,500 Dave Kellerman and his crews turned out 25,000 fans during the month a remarkable feat given that the firm's manufacturing plant was closed for several days because of storm damage and flooding Kellerman was especially pleased with the fact that overall financial performance for the period was favorable when compared…
Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 36,000 units next year and Product L is expected to sell 7,200 units. A unit of either product requires 0.9 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $3,304,800. What is the overhead cost per unit for Product L if the overhead cost per unit for Product H is $45.90
Axion manufactures a household product. The standard cost if this product is Direct material 3kg at $1.25 per kg = $3.75 per unit Direct Labour 3 hours at $5.10 per hour The company manufactures this product in batches of 50,000 units per month and all production is completed by the end of the period. In October the actual results were: Direct material 158,000 kg costing $189,600 Direct labour 156,000 hours costing $819,000 ($819,000 / 156,000hrs = $5.25) Prior to the compilation of the actual results some of the senior management were asked to comment on the possible outcome of the comparison exercise that would take place. The purchasing manager stated that he had obtained very good terms from his suppliers and there should be a favourable price variance. The personnel manager reported that no increase in wage rates had been agreed, so there should be no variance emerging in the wage rate…
Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at $1.30 per ounce) $4.55 Labor (0.30 hour at $12.00 per hour) 3.60 Overhead 2.70 Total $10.85 At the start of 2021, Scotch Brand planned to produce 20,000 cases of tape during the year. Overhead is allocated based on the number of cases of tape produced. Annual fixed overhead is budgeted at $18,000 and the variable overhead costs are budgeted at $1.80 per case. The following information summarizes the results for 2021: Actual production, 21,000 cases Purchased 275,000 ounces of material at a total cost of $343,750 Used 266,250 ounces of material in production Employees worked 22,000 hours, total labor cost $275,000 Actual overhead incurred,…
Midwest Industrial Products Corporation makes two products, Product H and Product L. Product H isexpected to sell 50,000 units next year and Product L is expected to sell 10,000 units. A unit of either product requires 0.2 direct labor-hours.The company’s total manufacturing overhead for the year is expected to be $1,920,000.Required:1. The company currently applies manufacturing overhead to products using direct labor-hours asthe allocation base. If this method is followed, how much overhead cost would be applied to eachproduct? Compute both the overhead cost per unit and the total amount of overhead cost that wouldbe applied to each product. (In other words, how much overhead cost is applied to a unit of ProductH? Product L? How much overhead cost is applied in total to all the units of Product H? Product L?)2. Management is considering an activity-based costing system and would like to know what impact thischange might have on product costs. For purposes of discussion, it has been…