Evaluate the direct material price

Reference no: EM1341509

Quantity variance, efficiency labor mix

Company manufactures only one product x. The company uses a standard cost system and has established the following standards per unit of product x:

Direct Materials
Standard Quantity Standard Price Standard Cost
3.0 lbs. $12 per lb. $36.00
Direct Labor
1.2 hrs. $15 per hr. $18.00

During the month of May, the following activity was recorded:
1. The company produced 6,000 units
2. A total of 21,000 lbs. of material was used at a cost of $241,500.
3. Each of 40 persons employed to produce the product x, worked an average of 160 hours at a rate of $16 per hour.

Required:
a. Compute the direct material price and quantity variance for the month.

b. The direct materials were purchased from a new supplier who is eager to enter into a long term contract. Would you recommend to sign the contract? Explain.

c. In the past, the 40 persons employed in production consisted of 16 experienced workers and 24 assistants. During May, the company experimented with 20 experienced workers and 20 assistants. Would you recommend that Trieste continue this new labor mix? Analyze and explain.

Reference no: EM1341509

Questions Cloud

Labor shortages of female pilots : Show the presence of a labor shortage of the female pilots, e.g. i.e. glass ceilings, labor statistics, etc.

Show the wal-mart and unions : Wal-Mart and Unions - Wal-Mart is the largest employer in the United States

Quantity variances for materials used and labor : Evaluate the total, price, and quantity variances for materials used and labor

Determine the standard cost per a dress : Determine the standard cost per a dress for direct materials and direct labor and the price variance, quantity variance, and total direct materials cost variance

Evaluate the direct material price : Quantity variance and efficiency labor mix - Evaluate the direct material price and quantity variance for the month.

Helper t-cells : Helper T-cells, he slide should have 3 or 5figures max and a series of bullet points that explain the player. The slides will then constitute a study guide that should help you with the immune response learning units. Next week you will put all th..

Managerial accounting - budgeted direct labor cost : Managerial Accounting - Budgeted Direct Labor Cost

Important information about fair labor standards act : These teenagers are employed throughout the company and are paid at an hourly wage rate of $3 per hour. Discuss the legality of this arrangement.

Direct labor savings and labor cost avoidance savings : What is the difference between direct labor savings and labor cost avoidance savings from a managerial perspective?

User Account

All Pages