Reference no: EM13876833
Comprehensive Variance Analysis Organet Stamping Company manufactures a variety of prod- ucts made of plastic and aluminum components. During the winter months, substantially all pro- duction capacity is devoted to lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. Because a variety of products are man- ufactured throughout the year, factory volume is measured using production labor hours rather than units of production.
Production volume has grown steadily for the past several years, as the following schedule of production labor indicates:
This year 32,000 hours
1 year ago 30,000 hours
2 years ago 27,000 hours
3 years ago 28,000 hours
4 years ago 26,000 hours
The company has developed standard costs for its several products. It sets standard costs for each year in the preceding October. The standard cost of a sprinkler this year was $4.00, computed as follows:
Direct materials:
|
Aluminum
|
0.2 pound x $0.40 per pound
|
$0.08
|
|
Plastic
|
1.0 pound x $0.38 per pound
|
0.38
|
|
Production labor
|
0.3 hour x $9.00 per hour
|
2.70
|
|
Overhead:
|
|
|
|
Variable
|
0.3 hour x $1.60 per hour
|
0.48
|
|
Fixed*
|
0.3 hour x $1.20 per hour
|
0.36
|
|
Total
|
|
$4.00
|
* Calculated using 30,000 production labor-hours per year as practical capacity.
During February of this year, 8,500 good sprinklers were manufactured. The following costs were incurred and charged to production:
Materials requisitioned for production:
|
Aluminum
|
(1,900 pounds x $0.40 per pound)
|
$ 760
|
|
Plastic: Regular
|
(6,000 pounds x $0.38 per pound)
|
2,280
|
|
Low grade†
|
(3,500 pounds x $0.38 per pound)
|
1,330
|
|
Production labor:
|
|
|
|
Straight time
|
(2,300 hours x $10.00 per hour)
|
23,000
|
|
Overtime
|
(400 hours x $15.00 per hour)
|
6,000
|
|
Overhead:
|
|
|
|
Variable
|
$5,200
|
|
|
Fixed
|
3,100
|
8,300
|
|
Costs charged to production
|
|
$41,670
|
Materials price variations are charged to a materials price variation account at the time the invoice is entered. All materials are carried in inventory at standard prices. Materials purchases for February follow:
|
Aluminum
|
(1,800 pounds x $0.48 per pound)
|
$864
|
|
Plastic:
|
|
|
|
Regular grade
|
(3,000 pounds x $0.50 per pound)
|
1,500
|
|
Low grade†
|
(6,000 pounds x $0.29 per pound)
|
1,740
|
† Plastic shortages forced the company to purchase lower-grade plastic than called for in the standards, which increased the number of sprinklers rejected on inspection.
Required: Compute the following for February:
1. The total variance from standard cost for the units produced this period.
2. The spending (budget) variance for the fixed portion of overhead costs.
3. The labor efficiency variance.
4. The labor rate variance.
5. The total variable manufacturing cost variance.
6. The variable overhead spending, efficiency, and flexible-budget variances.
7. The production-volume variance.
8. The materials variances (purchase-price and usage). Also comment on the effects of using materials of different grades.
|
Business ethics research - a global perspective
: Why do you think the author wrote this paper and Does it seem to be refuting someone else's interpretation of some event or phenomenon? Is it offering new information?
|
|
What range of mortgage rates makes the refinancing financial
: In the previous problem, assume that the closing cost for refinancing is $4,000, which you agree to be added to the balance of your loan. What range of mortgage rates makes the refinancing financially to your advantage?
|
|
Where you could perform a foreign work assignment
: Select a country where you could perform a foreign work assignment. (Germany) Explain and discuss why it is critical for employees (and their families) to have cultural training before embarking on an overseas assignment
|
|
Should training should be cut in tough times
: Should Training should be cut in tough times? Should Training should be increased during tough times
|
|
Compute the labor efficiency variance for february
: Compute the following for February: The total variance from standard cost for the units produced this period. The spending (budget) variance for the fixed portion of overhead costs and The labor efficiency variance.
|
|
What is the investor''s rate of return
: What is the day count of a $5,000,000 commercial paper sold for $4,900,000 if the discount rate is 3.5 %?
|
|
Discuss the major networking building blocks
: Discuss the major networking building blocks and their functions. Secondly, discuss software application's vulnerabilities, such as those found in web browsers.
|
|
Dimensions of human resource management practices
: "Outline the four dimensions of human resource management practices, including specific examples of human resource practices within each area"
|
|
Evaluate the viability of biometric authentication methods
: Describe your experience working with your chosen security-related tools. Analyse which aspects of the tools will be useful for security purposes for experts and for normal users.
|