Mr. Chan purchased 60,000 lbs. of chemical X for P210,000. During May 2020, Mr. Chan, manufactured 10,000 units of the product. The following information is available for the month of May: Direct materials: Standard for a unit: 5.8 gallons @ P3 per gallon Actual: 57,000 gallons Direct Labor: Standard for a unit: 30 min. @ P9 per DLH Actual: 4,800 DLHS @ P9.10 per DLH Compute the materials price and quantity variance.
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Mr. Chan purchased 60,000 lbs. of chemical X for P210,000. During May 2020, Mr. Chan, manufactured 10,000 units of the product. The following information is available for the month of May:
Direct materials:
Standard for a unit: 5.8 gallons @ P3 per gallon
Actual: 57,000 gallons
Direct Labor:
Standard for a unit: 30 min. @ P9 per DLH
Actual: 4,800 DLHS @ P9.10 per DLH
Compute the materials price and quantity variance.
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- 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.Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.The activity of moving materials uses four forklifts, each leased for 18,000 per year. A forklift is capable of making 5,000 moves per year, where a move is defined as a round trip from the plant to the warehouse and back. During the year, a total of 18,000 moves were made. What is the cost of the unused capacity for the moving goods activity? a. 5,400 b. 1,800 c. 7,200 d. 3,600
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- Murry, Inc. produced 1,000 units of company's product in 2024. The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.35 per yard. The accounting records showed that 2,500 yards of cloth were used and the company paid $1.40 per yard. Standard time was two direct labor hours per unit at a standard rate of $12.00 per direct labor hour. Employees worked 1,700 hours and were paid $10.50 per hour. What are the benefits of setting cost standards? Calculate the direct materials cost variance and the direct material effeciency variance as well as the direct labor cost and effeciency variances.Rubble, Inc. produced 1,100 backpacks, the company's product in 2020. The standard cost was 4 yards of cloth at a standard cost of $0.90 per yard. The accounting records show that 2,700 yards of cloth were used, and the company paid $1.15 per yard. Standard time to make the backpacks was 2 direct labor hours per unit at a standard rate of $9.80 per direct labor hours. Employees worked a total of 1,500 hours and were paid $9.15 per hour.Calculate the direct labor cost variance.Rubble, Inc. produced 1,040 backpacks, the company's product in 2020. The standard cost was 3 yards of cloth at a standard cost of $0.80 per yard. The accounting records show that 2,900 yards of cloth were used, and the company paid $1.05 per yard. Standard time to make the backpacks was 2 direct labor hours per unit at a standard rate of $9.80 per direct labor hours. Employees worked a total of 1,800 hours and were paid $9.15 per hour.Calculate the direct labor efficiency variance.
- Mixing Company manufactured 1,716 units of its only product during 2022. The inputs for this production are as follows: 520 pounds of Material A at a cost of $1.50 per pound 325 pounds of Material H at a cost of $2.75 per pound 580 direct labor hours at $48 per hour The firm manufactured 2,850 units of the same product in 2021 with the following inputs: 640 pounds of Material A at a cost of $1.90 per pound 500 pounds of Material H at a cost of $3.20 per pound 540 direct labor hours at $46 per hour In 2022, the partial financial productivity of Material H is:Mixing Company manufactured 2,640 units of its only product during 2022. The inputs for this production are as follows: 550 pounds of Material A at a cost of $1.50 per pound 500 pounds of Material H at a cost of $2.75 per pound 700 direct labor hours at $60 per hour The firm manufactured 3,300 units of the same product in 2021 with the following inputs: 700 pounds of Material A at a cost of $2.20 per pound 560 pounds of Material H at a cost of $3.50 per pound 600 direct labor hours at $58 per hour In 2022, the partial financial productivity of Material H is: Multiple Choice 0.21. 0.58. 1.92. 3.51. 5.27.Matthews Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 143,000 square feet of extruded vinyl purchased at $1.30 per square foot. Production required 400 direct labor hours that cost $16.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.35 per square foot. The labor standard was .028 direct labor hour per fender, at a standard cost of $15.00 per hour. Compute the cost and effeciency variances for direct materials and direct labor. Does tha pattern of variences suggest Matthews Fender's managers have been making tradeoffs? Explain.
