Analyses; Review of chapter
On May 1, Magnus Company began the manufacture of a new mechanical device known as Triple X. The company installed a standard cost system in accounting for manufacturing costs. The standard costs for a unit of Triple X follow:
Raw materials (5lbs @ $1/lb) 5.00
Direct labor (1 hr @ $8/hr) 8.00
Overhead (50% of direct labor costs) 4.00
17.00
The following data came from Magnus’ records for the month of May:
|
Units |
|
|
Actual production |
4,000 |
|
Units sold |
2,500 |
|
Debit |
Credit |
|
|
Sales |
50,000 |
|
|
Purchases (22,000 pounds) |
23,300 |
|
|
Materials price variance |
1,300 |
|
|
Materials quantity variance |
1,000 |
|
|
Direct labor rate variane |
770 |
|
|
Direct labor efficiency variance |
1,200 |
|
|
Manufacturing overhead total variance |
500 |
The amount shown above for the materials price variance is applicable to raw materials purchased during May.
Required:
Compute each of the following items for Matrix for the month of May. Show computations in good form.
1. Standard quantity of raw materials allowed (in pounds) for actual production.
2. Actual quantity of raw materials used (in pounds). (Hint: Be sure to consider the materials quantity variance.)
3. Standard direct labor hours allowed.
4. Actual direct labor hours worked.
5. Actual direct labor rate. (Hint: Be sure to consider the direct labor rate variance.)
6. Actual total overhead