WEEK 7 BA 510 PROBLEMS ASSIGNMENT Problem 11-11 BASIC VARIANCE


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For Mr Shrugal, I need help ..see attachment. Thanks 6 pages WEEK 7 BA 510 PROBLEMS ASSIGNMENT.docx WEEK 7 BA 510 PROBLEMS ASSIGNMENT Problem 11-11 BASIC VARIANCE ANALYSIS (LO 11-1, LO 11-2, LO 11-3) Barberry , Inc. manufactures a product called Fruta. The company was standard cost system and has established the following standards for one unit of Fruta. Standard Quantity Direct materials…………………………………. 1.5 pounds $ 9.00 Variable manufacturing overhead…… Standard Price or Rate Standard Cost $ 6.00 per pound 0.6 hours During June, the company recorded this activity, related to the production of Fruta: a. The company produced 3000 units in June. b. A total of 8,000 pounds of materials were purchased at a cost of $46,000. c. There was no beginning inventory of materials; however, at the end of the month, 2,000 pounds of materials remained in ending inventory. d. The company employs 10 person to work on the production of Fruta. During June, They worked an average of 160 hours at an average rate of $12.50 per-hour. e. Variable manufacturing overhead is assigned to Fruta on the basis of direct labor-hours. Variable manufacturing overhead costs during June totaled $3,600. The company’s management is anxious to determine the efficiency of Fruta production activities. REQUIRED: 1. For direct materials: a. Compare the price and quantity variances. b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase. Would you recommend that the company sign the contract/ Explain? 2. For labor employed in the production of Fruta: a. Compute the rate and efficiency variances b. In the past, 10 person employed in the production of Fruta consisted of 4 senior workers and 6 assistants. During June, the company experimented with 5 senior workers and 5 assistants. Would you recommend that the new labor mix be continued? Explain? 3. Compute the variable overhead rate and efficiency variances. What relation can you see between this efficiency variance and the labor efficiency variance? PROBLEM 11-12 LANDERS CORPORATION – Basic Variance Analysis; Impact of Variances on the Unit costs (LO 11-1, LO 11-2, LO 11-3) Landers Company manufactures a number of products. The standards relating to one of this product are shown below, along with actual cost data for May. Standard Cost per unit Actual Cost per Unit Direct materials: Standards: 1.8 feet at $3.00 per foot………………………. $ 5.40 Actual: 1.75 feet at $3.20 per foot………………………….. Direct labor: Standard: 0.90 hours at $ 18.00 per hour……………….. $16.20 Actual: 0.95 hours at $17.40 per hour…………………….. Variable overhead: Standard: 0.90 hours at $5.00 per-hour…………………..$ 4.50 Actual: 0.95 hours at $4.60 per-hour………………………. ______ $ 5.60 $16.53 $ 4.37 Total cost per unit………………………………………………………$26.10 26.50 Excess actual cost over standard cost per unit………….. $ $ 0.40 The Production Superintendent was pleased when he saw and commented “This $0.40 excess cost is well within the 2% limit management has set for acceptable variances. It’s obvious that there’s not much to worry about with this product.” Actual production for the month was 12,000 units. Variable overhead cost is assigned to products on the basis of direct labor-hours. There was no beginning or ending inventories of materials. REQUIRED: 1. Compute the following variance for May: a. Materials price and quantity variances b. Labor rate and efficiency variances. c. Variable overhead rate and Efficiency variances 2. How much of the $0.40 excess unit cost is traceable to each of the variances computed in (1)above. 3. How much of the $0.40 excess unit cost is traceable to apparent inefficient use of labor timer? 4. Do you agree that the excess unit cost is not of concern? PROBLEM 11-13, TOPAZ Company – Materials and Labor Variances: Computation from Incomplete Data.( LO 11-1, LO 11-2 ) Topaz Company makes one product and has set the following standards for materials and labor: Direct Direct Mater

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