Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite installations. Recently, building contractors have insisted on up-front bid prices for a house rather than the cost-plus system that Tom and Tony had been using. They worry because natural flaws in the granite make it impossible to tell in advance exactly how much granite will be used on a particular job. In addition, granite can be easily broken, meaning that Tom or Tony could ruin a slab and would need to start over with a new one. Sometimes the improperly cut pieces could be used for smaller installations, sometimes not. All their accounting is done by a local certified public accounting firm headed by Charlene Davenport. Charlene listened to their concerns and suggested that it might be time to implement tighter controls by setting up a standard costing system. Charlene reviewed the invoices pertaining to a number of Tom and Tony's previous jobs to determine the average amount of granite and glue needed per square foot. She then updated prices on both materials to reflect current conditions. The standards she developed for one square foot of counter installed were as follows: Granite, per square foot $50.00 Glue (10 oz. @ $0.15) 1.50 Direct labor hours: Cutting labor (0.10 hr. @ $15) 1.50 Installation labor (0.25 hr. @ $25) 6.25 These standards assumed that one seamless counter requires one sink cut (the space into which the sink will fit) as well as cutting the counter to fit the space available. Charlene tracked the actual costs incurred by Tom and Tony for granite installation for the next 6 months. She found that they completed 50 jobs with an average of 32 square feet of granite installed in each one. The following information on actual amounts used and cost was gathered: Granite purchased and used (1,640 sq. ft.) $82,948 Glue purchased and used (16,000 oz.) $2,560 Actual hours cutting labor 200 Actual hours installation labor 450 The actual wage rate for cutting and installation labor remained unchanged from the standard rate. Calculate the materials price variances and materials usage variances for granite and for glue for the past 6 months. Calculate the labor rate variances and labor efficiency variances for cutting labor and for installation labor for the past 6 months
Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite installations. Recently, building contractors have insisted on up-front bid prices for a house rather than the cost-plus system that Tom and Tony had been using. They worry because natural flaws in the granite make it impossible to tell in advance exactly how much granite will be used on a particular job. In addition, granite can be easily broken, meaning that Tom or Tony could ruin a slab and would need to start over with a new one. Sometimes the improperly cut pieces could be used for smaller installations, sometimes not. All their accounting is done by a local certified public accounting firm headed by Charlene Davenport. Charlene listened to their concerns and suggested that it might be time to implement tighter controls by setting up a standard costing system.
Charlene reviewed the invoices pertaining to a number of Tom and Tony's previous jobs to determine the average amount of granite and glue needed per square foot. She then updated prices on both materials to reflect current conditions. The standards she developed for one square foot of counter installed were as follows:
| Granite, per square foot | $50.00 |
| Glue (10 oz. @ $0.15) | 1.50 |
| Direct labor hours: | |
| Cutting labor (0.10 hr. @ $15) | 1.50 |
| Installation labor (0.25 hr. @ $25) | 6.25 |
These standards assumed that one seamless counter requires one sink cut (the space into which the sink will fit) as well as cutting the counter to fit the space available.
Charlene tracked the actual costs incurred by Tom and Tony for granite installation for the next 6 months. She found that they completed 50 jobs with an average of 32 square feet of granite installed in each one. The following information on actual amounts used and cost was gathered:
| Granite purchased and used (1,640 sq. ft.) | $82,948 |
| Glue purchased and used (16,000 oz.) | $2,560 |
| Actual hours cutting labor | 200 |
| Actual hours installation labor | 450 |
The actual wage rate for cutting and installation labor remained unchanged from the standard rate.
Calculate the materials price variances and materials usage variances for granite and for glue for the past 6 months.
Calculate the labor rate variances and labor efficiency variances for cutting labor and for installation labor for the past 6 months
Want to see the full answer?
Check out a sample Q&A here
Related Accounting Q&A
Q: Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite…
A: Click to see the answer
Q: Tom Belford and Tony Sorrentino own a small business devoted to kitchen and bath granite…
A: Solution: Introduction: Under the standard Costing method, standard cost is a predetermined cost and…
Q: GreenGrow Limited is a local landscaping company that does household and commercial landscaping.…
A: Inherent risk is presented in non-routine accounting or transactions or activities. It is complex…
Q: You started your own construction business and need to determine the cost of materials used to build…
A: Standard costing is a system of performance measurement, facilitating management by exception…
Q: Asma is a junior management accountant at Flower Cloth Ltd. Asma is given the task of compiling a…
A: Standards of ethical conducts can be defined as the standards that should be followed by the members…
Q: Furnaces Pty Ltd was advised by a local building inspector that one of the chimneys on its premises…
A: The term cost of an asset indicates the amount of cost that is being expensed for the installation…
Q: Furnaces Pty Ltd was advised by a local building inspector that one of the chimneys on its premises…
A: The charging of depreciation over the life of an asset is allowable for deduction and will be…
Q: Furnaces Pty Ltd was advised by a local building inspector that one of the chimneys on its premises…
A: Capital or Revenue The factors to be considered in determining the income tax deductibility of an…
Q: Furnaces Pty Ltd was advised by a local building inspector that one of the chimneys on its premises…
A: The old one has to be repaired because of it is unsafe to use. But instead of repairing the old…
Q: Dwight Donovan, the president of Fanning Enterprises, is considering two investment opportunities.…
A: in this we have to calculate net present value of both option and option with more net present value…
Q: e company should purchase an expensive new machine from Radi Ltd, where her brother is the new sales…
A: Standards of ethical conducts can be defined as the standards that should be followed by the members…
Q: As a cost accountant for San Francisco Cannery, you have been approached by Phil Perriman, canning…
A: Depreciation is a way to measure the monetary benefit received from an asset during an accounting…
Q: Suppose that a surfboard designer owns a building and is renting part of the building's space to a…
A: According to the Coase Theorem, in absence of the transaction costs, two parties can negotiate and…
Q: Daniel Barenboim sells and erects shell houses, that is, frame structures that are completely…
A: Expenses should be recognized in the same period in which related revenues are recognized. In other…
Q: Asma is a junior management accountant at Flower Cloth Ltd. Asma is given the task of compiling a…
A: Standards of ethical conducts: Standards of ethical conducts can be defined as the standards that…
Q: Fusion Metals Company is considering the elimination of its Packaging Department. Management has…
A: Dropping unprofitable products or segment: If the product or segment provide negative contribution…
Q: JJ King Ltd is a building contractor with a varying workload. In order to compensate for the…
A: Auditor opinion: An auditor’s opinion refers to a certification that is based on an audit of…
Q: Alderon Enterprises is evaluating a special order it has received for a ceramic fixture to be used…
A: Definition: Cost: The amount paid to purchase the asset, install it, and put it into operations, is…
Q: Moisha is developing material standards for her company. The operations manager wants grade A…
A: Standard cost is the cost that has been estimated by the company for the upcoming year. In this…
Q: Thai manufacturing Inc. began operations five years ago producing a new diagnostic instrument, which…
A: The question is based on the concept of Accounting theory.
Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Isaac Nuamah is the financial manager for Asonoma Micro Dryer Company, a company that manufactures…
A: NPV is the net current worth of cash flows that are expected to occur in the future. It is…
Q: Isaac Nuamah is the financial manager for Asonoma Micro Dryer Company, a company that manufactures…
A: Here, Cost of the Machine is GHS 16,000,000 Corporate tax rate is 30% and is paid one year in…
Q: Thai manufacturing Inc. began operations five years ago producing a new diagnostic instrument, it…
A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS Part A Other reasons might cause a firm to construct…
Q: Thai manufacturing Inc. began operations five years ago producing a new diagnostic instrument, it…
A: Click to see the answer
Q: Thai manufacturing Inc. began operations five years ago producing a new diagnostic instrument, it…
A: Click to see the answer
Q: Holton Chairs had been an innovative designer and producer of quality office chairs since Arnold…
A: A journal entry is made to record the financial transaction in the books of accounts. Note: As you…
Q: Salman signs a contract to build a warehouse in Sydney for his client. They agree on the price and…
A: A legal contract is an obligation arising out of an agreement between atleast two parties which is…
Q: Salman signs a contract to build a warehouse in Sydney for his client. They agree on the price and…
A: Contract is essentially an agreement that is intended to be enforced by law. A contract is something…
Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…
A: Click to see the answer
Q: Green and Gorgeous is a landscaping firm that offers a wide variety of services. The firm puts in…
A: Step 1 Activity-based costing (ABC) is a costing method that identifies activities in an…
Q: Kathleen Taylor is a high school student who has been investigating the possibility of mowing lawns…
A: The cost volume profit analysis or CVP analysis is used for the purpose of determining the effect on…
Q: Most manufacturers say that employee safety matters above everything else, but "safety doesn't…
A: Humanitarian Benefit is the most attractive for the point for the manufacturer to convince its…
Q: elly Slater desires to purchase a new front office computer system for his Surfers Paradise Inn.…
A: 1.Which are sunk costs? sunk costs are those cost which are irrelevant in decision making . These…
Q: Heaps Company produces jewelry that requires electroplating with gold, silver, and other valuable…
A: Capital budgeting is the technique widely used by the management to evaluate the investment project…
Q: Heaps Company produces jewelry that requires electroplating with gold, silver, and other valuable…
A: " Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first 3…
Q: Heaps Company produces jewelry that requires electroplating with gold, silver, and other valuable…
A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its…
Q: This case is arailable in MyFinancelab. Samuel and Grace Paganelli want to replace their 1996…
A: Leasing is use of vehicle without payment of full cost of vehicle and use for given period of time…
Q: AZ Technologies, a manufacturer of amplified pressure transducers, is trying to decide between a…
A: Estimated Salvage Value = Sum of ( Probability x Salvage Value )
Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…
A: Note: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…
Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…
A: First stage allocation of cost to activity cost pools Particulars Cleaning Carpets Travel to…
Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Because of a job change, Finn McBryde has just relocated to the southeastern United States. He sold…
A: This question have 4 sub parts, solution for first three parts will be provided. If you want…
Q: Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces…
A: There are two types of costing methods that are in use. One is traditional costing method and other…
Q: Recently, the sales and marketing manager for Pasifika Company, Mr. Reece Rooney couldn’t understand…
A: Click to see the answer
Q: Recently, the sales and marketing manager for Pasifika Company, Mr. Reece Rooney couldn’t understand…
A: Click to see the answer
Q: Recently, the sales and marketing manager for Pasifika Company, Mr. Reece Rooney couldn’t understand…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Recently, the sales and marketing manager for Pasifika Company, Mr. Reece Rooney couldn’t understand…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: A plastic-manufacturing company owns and operates a polypropylene-production facility that converts…
A: The calculation is:
Q: Fyodor Corporation has a Parts Division that does work for other Divisions in the company as well as…
A: Transfer price: It is the value at which goods and services are transferred from one unit to another…
