Beta Company produces two products, A and B
Not what you're looking for?
Beta Company produces two products, A and B, each of which uses materials X and Y. The following unit standard costs apply:
Product A:
Material X = 4 lbs @ $13, Material Y = 1 lb. @ $8.50, Direct Labor = 1/5 hr. @ $14
Product B:
Material X =6 lbs @ $13, Material Y = 2 lbs @ $8.50, Direct Labor = 1/3 hr. @ $14
During November, 4,200 units of A and 3,600 units of B were produced. Also, 39,000 pounds of X were purchased at $12.40 per pound and 11,000 pounds of Y were purchased at $8.70 per pound; all of these materials (but no other materials) were used for the month's production. This production required 2,025 direct labor-hours at $13.60 per hour.
Questions -
a) Calculate the material price and usage variances for the month.
b) Calculate the labor rate and efficiency variances for the month.
c) How would your answers to (a) and (b) change if you had been told that November's planned production activity was 4,000 units of A and 4,000 units of B?
d) How would your answers to (a) and (b) change if you had been told that November's sales were 4,000 units of A and 3,500 units of B?
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to calculate the material price and usage variances for the month.
Solution Preview
Please also see in the attached file for better format.
Beta Company produces two products, A and B, each of which uses materials X and Y. The following unit standard costs apply:
Product A:
Material X = 4 lbs @ $13, Material Y = 1 lb. @ $8.50, Direct Labor = 1/5 hr. @ $14
Product B:
Material X =6 lbs @ $13, Material Y = 2 lbs @ $8.50, Direct Labor = 1/3 hr. @ $14
During November, 4,200 units of A and 3,600 units of B were produced. Also, 39,000 pounds of X were purchased at $12.40 per pound and 11,000 pounds of Y were purchased at $8.70 per pound; all of these materials (but no other materials) were used for the month's production. This production required 2,025 direct labor-hours at $13.60 per hour.
Questions -
a) Calculate the material price and usage variances for the month.
Materials price variance = AQX(APX - SPX) + AQY(APY - SPY)
= 39,000 ...
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.