GNB+13e+Questions+Ch+11 - S tandard Costs and Operating...

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481 Standard Costs and Operating Performance Measures • _ fj K17 i£l Eile ~dit 'liew Insert FQ.rmat lools Qata ~w !:ielp CI ~ ~ d I!:i ~ [g, ~ .)i, ~ II! • IlITiI <1.' . c_· ., f,. 1: • U U b 100% IJ) 12 B I II R ~ ~ m. $ % J ~og .;~g ~~ i~ 4.. Euro X » F Standard Cost $ 50.00 17.50 490 ~ D E Standard Pnce or Rate $2000 per ounce $1250 per hour $3.50 B L C Standard Quantity 2.5 ounces 1 A hours 1 A >I \Shel!t1jshl1et2jshSet3! I ~J I ~ (, A\jtoShapes·" "D 0 ~ .... ~:: La.ll:8:l <!>o .t. . a.. == ::::.: ~ lilii • 1 2 Di rect materi als 3 'Di rect labor 4 Variable manufacturing overhead 5 6 A· During November, the following activity was recorded relative to production of Fludex: Materials purchased, 12,000 ounces at a cost of $225,000. There was no beginning inventory of materials; however, at the end of the month, 2,500 ounces of material remained in ending inventory. The company employs 35 lab technicians to work on the production of Fludex. During November, they worked an average of 160 hours at an average rate of $12 per hour. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Vari- able manufacturing overhead costs during November totaled $18,200. During November, 3,750 good units of Fludex were produced. The company's management is anxious to determine the efficiency of Fludex production )activities. For direct materials used in the production of Fludex: a. Compute the price and quantity variances. b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract? Explain. For direct labor employed in the production of Fludex: Compute the rate and efficiency variances. In the past, the 35 technicians employed in the production of Fludex consisted of 20 se- nior technicians and 15 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to save costs. Would you recom- mend that the new labor mix be continued? Explain. Compute the variable overhead rate and efficiency variances. What relation can you see between this efficiency variance and the labor efficiency variance? PROBLEM 11-13 Measures of Internal Business Process Performance [LOS] DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufac- turing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations. Throughputtime (days) . ? ? ? ? Delivery cycle time (days) . ? ? ? ? Manufacturing cycle efficiency (MCE) . ? ? ? ? Percentage of on-time deliveries . 91% 86% 83% 79% Total sales (units) .
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This note was uploaded on 02/10/2011 for the course UGBA 102B taught by Professor Fan during the Spring '08 term at University of California, Berkeley.

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GNB+13e+Questions+Ch+11 - S tandard Costs and Operating...

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