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PROBLEM 10 16 Multiple Products Materials and Processes LO1 LO2 Monte Rosa Corporation produces two products Alpha8s and Zeta9s which pass through two operations Sintering and Finishing

PROBLEM 10–16 Multiple Products, Materials, and Processes [LO1, LO2]

Monte Rosa Corporation produces two products, Alpha8s and Zeta9s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X342 and Y561. The company uses a standard cost system, with the following standards for each product (on a per unit basis):

 

 

Information relating to materials purchased and materials used in production during May follows:

 

Material

Purchases

Purchase Cost

Standard Price

Used in Production

X342 . . . . . . . . . . .

14,000 kilos

$51,800

$3.50 per kilo

8,500 kilos

Y561 . . . . . . . . . . .

15,000 liters

$19,500

$1.40 per liter

13,000 liters

 

The following additional information is available:

a.       The company recognizes price variances when materials are purchased.

b.       The standard labor rate is $20.00 per hour in Sintering and $19.00 per hour in Finishing.

c.        During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $27,000, and 2,850 direct labor-hours were worked in Finishing at a total labor cost of $59,850.

d.       Production during May was 1,500 Alpha8s and 2,000 Zeta9s.

 

 

 

 

 

Required:

1.       Prepare a standard cost card for each product, showing the standard cost of direct materials and direct labor.

2.       Compute the materials quantity and price variances for each material.

3.       Compute the direct labor efficiency and rate variances for each operation.

Jun 28 2020 View more View Less

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