Practice_Test_SOLUTION_Oct_2010

Practice_Test_SOLUTION_Oct_2010 - QUESTION 1 MPV Purchase...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
QUESTION 1 MPV Purchase @ actual cost $2,690 Purchase @ std cost (5,600 x $0.50) 2,800 MPV $110 FAV LPV Actual payroll $ 7,600 Actual DLH @ std rate (1,870 X $4) 7,480 LPV $120 UNF QUANTITY VARIANCES MATERIALS LABOUR Finished 900 units 900 + EI WIP 200 120 - BI WIP 120 60 Equivalent prod’n 980 960 Std Quantity ( 4 Kg) 3,920 (2 DLH) 1,920 DLH Actual Quantity 3,800 1,870 120 Kg 50 DLH Standard Price X $0.50 X $4 $ 60 FAV $200 FAV B. Pro-ration of variances would not be necessary or appropriate if i) the variances are immaterial (assuming the standards themselves are reasonable) and ii) the variances are material and unfavourable and represent a loss. QUESTION 2 A)i) Maintenance P.S. Molding Finishing 8,000 20,000 (8,000) 5,714 2,286 (20,000) 9,412 10,588 15,126 12,874 ii)Close Maintenance first (PS uses 30% of M versus M’s use of 15% of PS) Maintenance P.S. Molding Finishing 8,000 20,000 (8,000) 2,400 4,000 1,600 22,400 (22,400) 10,541 11,859 14,541 13,459 1
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
ii)Close PS first (PS has the largest service cost) Maintenance P.S. Molding Finishing 8,000 20,000 3,000 (20,000) 8,000 9,000 11,000 (11,000) 7,857 3,143 15,857 12,143 iii) M = 8,000 + 0.15 P P = 20,000 + 0.30 M M = 8,000 + 0.15 { 20,000 + 0.30 M } M = 8,000 + 3,000 + 0.045 M 0.955 M = 11,000 M = 11,518 P = 23,455 Maintenance P.S. Molding Finishing 8,000 20,000 (11,518) 3,455 5,759 2,304 3,518 (23,455) 9,382 10,555 15,141 12,859 B.Finding and eliminating inefficiencies in both the service departments and in the
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern