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. Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Eachof the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standardsfor each product (on a per unit basis):Raw MaterialStandard Labor TimeProductAlpha6Zeta7Sintering0.40 hours0.10 hoursFinishing0.80 hours0.60 hoursX442Y6612.0 liters4.0 liters1.2 kilos3.0 kilosInformation relating to materials purchased and materials used in production during May follows:Purchases14,500 kilos15,500 litersStandard Price$ 4.00 per kilo$ 1.90 per literUsed in Production9,000 kilos13,500 litersMaterialPurchase Cost$ 60,900$ 27,900X442Y661The following additional information is available:a. The company recognizes price variances when materials are purchased.b. The standard labor rate is $21.00 per hour in Sintering and $19.50 per hour in Finishing.c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $28,750, and 2,900 direct labor-hours wereworked in Finishing at a total labor cost of $62,350.d. Production during May was 2,000 Alpha6s and 2,250 Zeta7s.

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Description: 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 op

Materials price variance=Standard Price-Actual Price×Actual Quantity Materials quantity…

Answered: Mickley Corporation produces two…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 2MC: TyeDye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to...

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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.

Mickley Corporation produces two products, Alpha6s 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):
Raw Material
Standard Labor Time
Product
Alpha6
Zeta7
Sintering
0.40 hours
0.10 hours
Finishing
0.80 hours
0.60 hours
X442
Y661
2.0 liters
4.0 liters
1.2 kilos
3.0 kilos
Information relating to materials purchased and materials used in production during May follows:
Purchases
14,500 kilos
15,500 liters
Standard Price
$ 4.00 per kilo
$ 1.90 per liter
Used in Production
9,000 kilos
13,500 liters
Material
Purchase Cost
$ 60,900
$ 27,900
X442
Y661
The following additional information is available:
a. The company recognizes price variances when materials are purchased.
b. The standard labor rate is $21.00 per hour in Sintering and $19.50 per hour in Finishing.
c. During May, 1,250 direct labor-hours were worked in Sintering at a total labor cost of $28,750, and 2,900 direct labor-hours were
worked in Finishing at a total labor cost of $62,350.
d. Production during May was 2,000 Alpha6s and 2,250 Zeta7s.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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