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International Cookwares Delivery Performance Measures

1. The management of International Cookwares believes that delivery performance measures must be improved if the company is to maintain its competitive edge. The following data are considered to be typical of the time to complete orders. ? Process time: 4.0 days ? Wait time to the start of production: 15.0 days ? Move time: 3.0 days ? Inspection time: 2.0 days ? Queue time during the production process: 8.0 days What is the manufacturing cycle efficiency?
a. 12.5%
b. 76.4%
c. 87.5%
d. 23.6%

2. The following labor standards have been established for a particular product: Standard labor hours per unit of output 4.2 hours Standard labor rate $13.60 per hour The following data pertain to operations concerning the product for the last month: Actual hours worked 2,900 hours Actual total labor cost $38,715 Actual output 800 units What is the labor rate variance for the month?
a. $725 F
b. $200 U
c. $200 F
d. $725 U

3. The Bowden Company makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data: Number of units produced 10,000 Material price variance $8,400 Favorable Material quantity variance $8,000 Unfavorable Actual direct material used 21,000 pounds Direct materials standard price $8 per pound The standard cost of direct material for one unit of output is:
a. $2
b. $16
c. $8
d. $10

4. Sharifi Hospital bases its budgets on patient-visits. The hospital's static budget for October appears below: Budgeted number of patient-visits 8,500 Budgeted variable overhead costs: Supplies (@$4.70 per patient-visit) $ 39,950 Laundry (@$7.80 per patient-visit) 66,300 Total variable overhead cost 106,250 Budgeted fixed overhead costs: Wages and salaries 50,150 Occupancy costs 84,150 Total fixed overhead cost 134,300 Total budgeted overhead cost $240,550 The total overhead cost at an activity level of 9,200 patient-visits per month should be:
a. $260,360
b. $250,070
c. $249,300
d. $240,550

5. Rodriques Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,630 square feet and the actual level of activity was 1,720 square feet. The company's owner budgets for supply costs, a variable overhead cost, at $3.40 per square foot. The actual supply cost last month was $6,750. In the company's flexible budget performance report for last month, what would have been the variance for supply costs?
a. $353 U
b. $902 U
c. $306 U
d. $1,208 U

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Solution Summary

5 multiple choice questions on manufacturing cycle efficiency, labour variance rate, direct-material cost, overhead cost and supply cost variance are answered in a Word attachment with explanation.