None Orion Corporation has established the following standards for the prime costs of one unit of its chief product, dartboards.Direct materialDirect laborTotalStandard Quantity13.00 pounds2.10 hourStandard Price or Rate$ 2.90 per pound$ 14.00 per hourStandard Cost$ 37.7029.40$ 67.10During June, Orion purchased 263,000 pounds of direct material at a total cost of $810,040. The total wages for June were $600,300,90 percent of which were for direct labor. Orion manufactured 18,000 dartboards during June, using 225,000 pounds of the directmaterial purchased in June and 41,400 direct-labor hours.Required:Compute the following variances for June.Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable".Select "None" and enter "O" for no effect (i.e., zero variance).> Answer is complete but not entirely correct.1. Direct-material price variance$47,340Unfavorable2. Direct-material quantity variance$26,100Favorable3. Direct-material purchase price variance$47,340 Unfavorable4. Direct-labor rate variance5. Direct-labor efficiency variance$20,700 Favorable$50,400 Unfavorable

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Answered: Orion Corporation has established the…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...

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During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK 1 and Tool SK3, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.
Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet: Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 274,000 pounds at 2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at 17.95 per hour e. Fixed overhead: 161,700 f. Variable overhead: 122,000 Required: 1. Compute price and usage variances for direct materials. 2. Compute the direct labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variances. Interpret the volume variance. 4. Compute the variable overhead spending and efficiency variances. 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs f. Closing out of variances to Cost of Goods Sold
Wyandotte Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 256,900, direct labor cost was 176,000, and overhead cost was 308,400. There were 40,000 units produced. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 6.62 is direct materials and 7.71 is overhead. What is the prime cost per unit? Conversion cost per unit?
During the week of June 12, Harrison Manufacturing produced and shipped 15,000 units of its aluminum wheels: 3,000 units of Model A and 12,000 units of Model B. The following costs were incurred: Required: 1. Assume initially that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. What if Model A is responsible for 40 percent of the materials cost? Show how the unit cost would be adjusted for this condition.
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
ABC Company began operations on September 1, 2022. For its first month of operations, ABC Company set the following standards for each unit of its single product: standard price/rate $6.25 per pound $14.00 per hour $11.30 per hour ABC Company reported the following information for September: 1. 28,000 pounds of direct materials were purchased at a cost of $7.10 per pound. direct materials direct labor variable overhead 2. 56,000 direct labor hours were worked at a total cost of $852, 440. The variable overhead cost for the month totaled $620,000. 6,800 units were produced, At September 30, ABC Company had 4,300 pounds of direct materials on hand. 3. standard quantity/hours 4 pounds 8 hours 8 hours 5. calculate the direct material quantity variance for September. If the variance is favorable, place a minus sign in front of your answer (1.e., -5000), If the variance is unfavorable, simply enter your answer as a number (1.e., 5000).
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Standard Price Standard or Rate $2.30 per pound $8.50 per hour Hours Cost Direct materials 7.40 pounds $17.02 Direct labor 0.90 hours $ 7.65 During the most recent month, the following activity was recorded: a. 21,500.00 pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 2,000 hours of direct labor time were recorded at a total labor cost of $21,000. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations…
Monroe Materials processes a purchased material, PM-20, and produces three outputs, Alpha, Beta, and Gamma. In February, the costs to process PM-20 are $524,000 for materials and $196,000 for conversion costs. The results of the processing follow: Units Produced Sales Value per Unit Alpha 24,000 $ 9.60 Beta Gamma 19,200 4,800 18.00 80.00 Required: Assign costs to Alpha, Beta, and Gamma for February using the physical quantities method. Product Cost Assigned Alpha Beta Gamma Total $ 0
2) Ehrlich Inc. makes a product with the following standard costs for direct material and direct labor: Quantity/Hours Per Unit Price /Rate Direct Material 6.00 $ 2.80 Direct Labor 1.50 $ 16.00 During the most recent month, 6,500 units were produced. The costs associated with the month’s production of this product were as follows: Quantity/Hours Price /Rate Materials purchased 41,000 lbs $3.00/per lbs. Materials used in production 32,000 lbs Direct labor 9,950 hrs $14.50/per hr. Required: Part 1 - Calculate the standard cost expected to make 6,500 units of product.(Materials and labor) Part 2 - Compute applicable Variances… Material Price Variance Material Quantity Variance Labor Rate Variance Labor Efficiency Variance Labor Spending Variance
Sharp Company manufactures a product for which the following standards have been set: Standard Quantityor Hours Standard Priceor Rate StandardCost Direct materials 3 feet $ 5 per foot $ 15 Direct labor ? hours ? per hour ? During March, the company purchased direct materials at a cost of $43,335, all of which were used in the production of 2,425 units of product. In addition, 4,000 direct labor-hours were worked on the product during the month. The cost of this labor time was $28,000. The following variances have been computed for the month: Materials quantity variance $ 3,750 U Labor spending variance $ 2,780 U Labor efficiency variance $ 780 U Required: 1. For direct materials: a. Compute the actual cost per foot of materials for March. b. Compute the price variance and the spending variance. 2. For direct labor: a. Compute the standard direct labor rate per hour. b. Compute the standard hours allowed for the month’s…

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