McGrew_MBA 733 Week 5 Problems

McGrew_MBA 733 Week 5 Problems - Trish McGrew MBA 733 Week...

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Trish McGrew MBA 733 Week 5 Problems Beta Company produces two products, A and B, each of which uses materials X and Y. The following unit standard costs ap Product A: Material X = 4 lbs @ $13, Material Y = 1 lb. @ $8.50, Direct Labor = 1/5 hr. @ $14 Product B: Material X =6 lbs @ $13, Material Y = 2 lbs @ $8.50, Direct Labor = 1/3 hr. @ $14 During November, 4,200 units of A and 3,600 units of B were produced.   Also, 39,000 pounds of X were purchased at $12.40 per pound and 11,000 pounds of Y were purchased at $8.70 per pound all of these materials (but no other materials) were used for the month's production. This production required 2,025 direct labor-hours at $13.60 per hour. Questions - a) Calculate the material price and usage variances for the month. Materials pric #NAME? = 39,000 lbs($12.40 – $13.00) + 11,000 lbs($8.70 - $8.50) = -$23,400 + $2,200 = $21,200 Favorable AQ = actual quantity purchased, AP = actual price/pound, SP = standard price/pound Materials usa Err:509 = ($13.00)(39,000 lbs) – ($13.00)(4,200 unitsx4 lbs + 3,600 unitsx6 lbs) + ($8.50)(11,000 lbs) – ($8.50)(4,200 unitsx1 lb + 3, = $507,000 - $499,200 + $93,500 - $96,900 = $4,400 Unfavorable AQ = actual quantity used, SQ = standard quantity to be used b) Calculate the labor rate and efficiency variances for the month. Labor rate variance #NAME?                       = 2,025 hours($13.60 – $14.00) = $810 Favorable AH = actual direct labor hours, AR = actual direct labor rate/hour, SR = standard direct labor rate/hour Labor efficien = SR (AH - SH)
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