The computer system for Number 14, LLC, a manufacturer of basketball jerseys, fell victim to an internet virus. The manager was able to determine from various sources that 2,000 more yards were used in the production of 21,250 jerseys last period than purchased. Records show that the total direct material variance was $40,000 unfavorable. The direct material price variance was documented to be $120,000 unfavorable, which resulted from the actual cost per yard of direct material being $2 higher than the expected cost of $14 per yard. Additional documentation could not be found for the direct materials quantity variance. The amount of yards the company expected to use per jersey is O A. 3.2000 yards O B. 3.4000 yards O c. 3.6125 yards O D. 2.6487 yards O E. 3.0924 yards

The computer system for Number 14, LLC, a manufacturer of basketball jerseys, fell victim to an internet virus. The manager was able to determine from various sources that 2,000 more yards were used in the production of 21,250 jerseys last period than purchased. Records show that the total direct material variance was $40,000 unfavorable. The direct material price variance was documented to be $120,000 unfavorable, which resulted from the actual cost per yard of direct material being $2 higher than the expected cost of $14 per yard. Additional documentation could not be found for the direct materials quantity variance. The amount of yards the company expected to use per jersey is O A. 3.2000 yards O B. 3.4000 yards O c. 3.6125 yards O D. 2.6487 yards O E. 3.0924 yards

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Description: The computer system for Number 14, LLC, a manufacturer of basketball jerseys, fell victim to an internet virus. The manager was able to determine from various sources that 2,000 more yards were used in the production of 21,250 jerseys lastperiod tha

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 5PA: Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but...

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The management of Golding Company has determined that the cost to investigate a variance produced by its standard cost system ranges from 2,000 to 3,000. If a problem is discovered, the average benefit from taking corrective action usually outweighs the cost of investigation. Past experience from the investigation of variances has revealed that corrective action is rarely needed for deviations within 8% of the standard cost. Golding produces a single product, which has the following standards for materials and labor: Actual production for the past 3 months follows, with the associated actual usage and costs for materials and labor. There were no beginning or ending raw materials inventories. Required: 1. What upper and lower control limits would you use for materials variances? For labor variances? 2. Compute the materials and labor variances for April, May, and June. Identify those that would require investigation by comparing each variance to the amount of the limit computed in Requirement 1. Compute the actual percentage deviation from standard. Round all unit costs to four decimal places. Round variances to the nearest dollar. Round variance rates to three decimal places so that percentages will show to one decimal place. 3. CONCEPTUAL CONNECTION Let the horizontal axis be time and the vertical axis be variances measured as a percentage deviation from standard. Draw horizontal lines that identify upper and lower control limits. Plot the labor and material variances for April, May, and June. Prepare a separate graph for each type of variance. Explain how you would use these graphs (called control charts) to assist your analysis of variances.
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Ed Co. manufactures two types of O rings, large and small. Both rings use the same material but require different amounts. Standard materials for both are shown. At the beginning of the month, Edve Co. bought 25,000 feet of rubber for $6.875. The company made 3,000 large O rings and 4,000 small O rings. The company used 14,500 feet of rubber. A. What are the direct materials price variance, the direct materials quantity variance, and the total direct materials cost variance? B. If they bought 10,000 connectors costing $310, what would the direct materials price variance be for the connectors? C. If there was an unfavorable direct materials price variance of $125, how much did they pay per toot for the rubber?
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The computer system for Number 14, LLC, a manufacturer of basketball jerseys, fell victim to an internet virus. The manager was able to determine from various sources that 2,000 more yards were used in the production of 20,000 jerseys last period than purchased. Records show that the total direct material variances was $40,000 favorable. The direct material price variance was documented to be $120,000 unfavorable, which resulted from the actual cost per yard of direct material being $2 higher than the expected cost of $16 per yard. Additional documentation could not be found for the direct materials quantity variance. The amount of yards the company expected to use per jersey is A. 3.6125 yards B. 3.6714 yards C. 3.6000 yards D. 3.3875 yards E. 3.5000 yards
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