Standard quantity or hours standard price or rate

This preview shows page 3 - 6 out of 15 pages.

Standard quantity orhoursStandard price orrateStandardcostDirectmaterials3.5 feet$6.00 per foot$21.00Direct labor0.4 hours$10 per hour$ 4.00During April, the following activity was recorded regarding the new product:Purchased 7,000 feet of material at a cost of $5.75 per foot.Used 6,000 feet of material to product 1,500 units of the new product.Worked 725 direct labor hours on the new product at a cost of $8,120.3.(Ch 7)The direct material price variance for April is:a.$1,750 unfavorableb.$1,750 favorablec.$1,500 unfavorabled.$1,500 favorableThe correct answer is B. See the solution below for more details regarding the calculation.
4.(Ch 7)The direct material quantity variance for April is:
Page 3 of 15
6,000 feet × $6.00 per foot= $36,000Quantity Variance, $4,500 U = SP * (AQ – SQA)*1,500 units × 3.5 feet per unit = 5,250 feet5.(Ch 7)The direct labor rate variance for April is:
6.(Ch 7)The direct labor efficiency variance for April is:
7.(Ch 7)Does it appear that Blunck Co.is buying lower quality goods that might increase waste?Page 4 of 15
a)No, but it looks like they should try reducing costs somehow.b)No, and it doesn’t look like they need to bother with this.c)Yes, but the tradeoff is not worth it.d)Yes and the tradeoff is worth it.The correct answer is C. Since the total direct material variance is $2,750 unfavorable, this does notappear to be a good tradeoff.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 15 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
Guymon
Tags
Net Present Value, Correct Answer, McInnis, Gilde Industries, Blunck Co

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture