Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12...

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Accounting

Saskatewan Can Company manufactures recyclable soft-drink cans.A unit of production is a case of 12 dozen cans. The followingstandards have been set by the production-engineering staff and thecontroller.

Direct Labor:Direct Material:
Quantity,0.16 hourQuantity, 9 kilograms
Rate, $8.00 per hourPrice, $0.42 per kilogram

Actual material purchases amounted to 233,200 kilograms at$0.475 per kilogram. Actual costs incurred in the production of22,000 units were as follows: Direct labor: $33,264 for 3,960 hoursDirect material: $98,230 for 206,800 kilograms Required: Use thevariance formulas to compute the direct-material price and quantityvariances, the direct-material purchase price variance, and thedirect-labor rate and efficiency variances. Indicate whether eachvariance is favorable or unfavorable. (Indicate the effect of eachvariance by selecting "Favorable" or "Unfavorable". Select "None"and enter "0" for no effect (i.e., zero variance).)

Direct Material Price Variance:

Direct Material Quantity Variance:

Direct Material Purchase Price Variance:

Direct Labor Rate Variance:

Direct Labor Efficiency Variance:

Answer & Explanation Solved by verified expert
3.6 Ratings (507 Votes)
Material Std qty allowed 220009 198000 kgs Std price per kg 042 per kg Actual used 206800 kgs Actual qty purchased 233200 kgs Actual Price    See Answer
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Saskatewan Can Company manufactures recyclable soft-drink cans.A unit of production is a case of 12 dozen cans. The followingstandards have been set by the production-engineering staff and thecontroller.Direct Labor:Direct Material:Quantity,0.16 hourQuantity, 9 kilogramsRate, $8.00 per hourPrice, $0.42 per kilogramActual material purchases amounted to 233,200 kilograms at$0.475 per kilogram. Actual costs incurred in the production of22,000 units were as follows: Direct labor: $33,264 for 3,960 hoursDirect material: $98,230 for 206,800 kilograms Required: Use thevariance formulas to compute the direct-material price and quantityvariances, the direct-material purchase price variance, and thedirect-labor rate and efficiency variances. Indicate whether eachvariance is favorable or unfavorable. (Indicate the effect of eachvariance by selecting "Favorable" or "Unfavorable". Select "None"and enter "0" for no effect (i.e., zero variance).)Direct Material Price Variance:Direct Material Quantity Variance:Direct Material Purchase Price Variance:Direct Labor Rate Variance:Direct Labor Efficiency Variance:

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