Monument Golf Markers produces granite tee box signs. These monuments are etched with an image of
the golf hole, distance to green, and other information. Each monument typically requires 1,200
pounds of granite. The standard cost
for granite is estimated at $260 per ton (2,000 pounds). During a recent month, 600 monuments were
constructed. The company purchased and
used 350 tons of material at a cost of
$275 per ton.
Compute the total variance for materials, and determine how much is related
to price and how much is related to quantity.
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| Downhill Manufacturing produces snow skis in a two-step
production process – cutting and laminating.
The manufacturing center is supported by two service centers – a
health clinic and a janitorial service.
The following table reveals certain facts about each activity: |
| | Health clinic | | Janitorial service | | Cutting department | | Laminating department | |
| Employees | 2 | | 4 | | 10 | | 15 | |
| Square footage | 1,200 | | 600 | | 12,000 | | 8,000 | |
| Cost incurred | $ 180,000 | | $ 125,000 | | $ 700,000 | | $ 800,000 | |
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| (a) | Using the direct
method, allocate the service department costs to production. The clinic costs are to be allocated based
on employees, and the janitorial costs are to be allocated based on the
square footage. |
| (b) | Using the step
method, allocate the service department costs to production. The clinic costs are to be allocated based
on employees, and the janitorial costs are to be allocated based on the
square footage. The first step will be
to allocate clinic costs. The clinic
employees maintain their space and do not rely upon the janitorial
service. However, janitorial employees
occasionally sustain an injury and utilize the clinic. |
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Custom Clubs produces handmade golf clubs. The process is labor intensive. The speed at which a club can be built
depends on the skill level of the individual worker. Management has established a standard of 2
labor hours per club. The standard
wage rate is $12 per hour. During a
recent month, 2,500 custom clubs were produced. Management was pleased that only 4,900
labor hours were worked; however, total wages amounted to $63,700.
Compute the total variance for labor, and determine how much is related to
rate and efficiency components.
|
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Custom Clubs produces handmade golf clubs. The process is labor intensive. The speed at which a club can be built
depends on the skill level of the individual worker. Management has established a standard of 2
labor hours per club. The standard
wage rate is $12 per hour. During a
recent month, 2,500 custom clubs were produced. Management was pleased that only 4,900
labor hours were worked; however, total wages amounted to $63,700.
Compute the total variance for labor, and determine how much is related to
rate and efficiency components.
|
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"
