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Leto [7]
3 years ago
14

​Fender, which uses a standard cost​ system, manufactured 20 comma 000 boat fenders during 2018​, using 141 comma 000 square fee

t of extruded vinyl purchased at $ 1.45 per square foot. Production required 420 direct labor hours that cost $ 16.50 per hour. The direct materials standard was seven square feet of vinyl per​ fender, at a standard cost of $ 1.50 per square foot. The labor standard was 0.027 direct labor hour per​ fender, at a standard cost of $ 15.50 per hour.
Complete the costs and efficiency variances for Direct materials and direct labor. Does the pattern of variances suggest Fender's managers have been making trade-offs? Explain.
Business
1 answer:
jeka943 years ago
4 0

Answer:

The costs and efficiency variances for Direct materials are  7,050 F  and 1500 U  and  The costs and efficiency variances for direct labor are 1,860 F and 1440 U.

Explanation:

Materials:

Standard Budget                          Actual

Units  $ Total            Units  $    Total

140000 1.5 210,000          141000 1.45    204,450

Direct Material Variances:

Direct Material Price Variance = Standard Cost for Actual Quantity – Actual Cost

                                                  = 210,000 - 204,450

                                                  = 5,550 F

Direct Material Price Usage Variance = Actual Quantity at Actual Price - Standard Quantity at Actual price  

                                                               = 1.45 *( 141,000 - 140,000)

                                                                = 7,050 F

Direct Material Efficiency Variance

= Standard Cost of Standard Quantity for Actual Production – Standard Cost of Actual Quantity in Standard Proportion

= 1.5 * (140000 - 141000)

= 1500 U

Labor:

Standard Budget                                        Actual

Hours                        $ Total  Hours $ Total

540 (20000*0.027)     15.5 8,370  420      16.5 6,930

Direct Labor Variances:

Direct Labor Rate Variance = Actual hours worked × Actual rate – Actual hours worked × Standard rate

= 6,930 - 6,510

= 420 F

Direct Labor Usage Variance = Actual hours worked × Standard rate – Standard hours allowed × Standard rate

= 15.5 * (420 - 540)

= 1,860 F

Direct Labor Efficiency Variance = Standard Cost of Standard Quantity for Actual Production – Standard Cost of Actual Quantity in Standard Proportion

= 8,370 - 6,930

= 1440 U  

Therefore, The costs and efficiency variances for Direct materials are  7,050 F  and 1500 U  and  The costs and efficiency variances for direct labor are 1,860 F and 1440 U.

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Albert purchased a tract of land for $140,000 in 2016 when he heard that a new highway was going to be constructed through the p
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Answer and Explanation:

Albert cannot claim any loss during 2019.

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8 0
3 years ago
Is the loss in efficiency due to market power large or​ small? explain. the loss in efficiency due to market power is?
saul85 [17]

Answer:

Small

Explanation:

Competition limits the market power, even when the market is not perfectly comparative.

Market power refers to a company's relative ability to manipulate the price of an item in the marketplace by manipulating the level of supply demand or both.

A company with substantial market power has the ability to manipulate the market price and thereby control its profit margin, and possibly the ability to increase obstacle to potential new entrants into the market.

5 0
3 years ago
John Jones owns and manages a café in Collegetown whose annual revenue is $5,000. Annual expenses are as follows:
OleMash [197]

Answer:

a.) $750

b.) Yes, the café is making an economic profit of $25 per year.

Yes, he should stay in the café business.

c.) No, the café is making an economic loss of $75 per year

No, he should not stay in the café business.

d.)$3,250

e.) $250

Explanation:

a) John's accounting profit is his revenue minus his explicit costs:$5,000 - $4,250 = $750

b) In this case, John's opportunity cost of running the café is $725 per year ($1,000 − $275 = $725). Thus, the café is making an economic profit of $25 per year ($5,000 − $4,250 − $725 = $25). Since the café is earning an economic profit, John should stay in the café business.

c) In this case, John's opportunity cost of running the cafe is $825 per year ($1,100 − $275 = $825). Thus, the cafe is earning an economic loss of $75 per year ($5,000 − $4,250 − $825 = −$75). Since the café is earning an economic loss, John should not stay in the café business.

d) John's accounting profit equals his revenue minus his explicit costs. If he doesn't need a loan, then his explicit costs equal $3,250. So, his accounting profit equals $1,750 (= $5,000 − $3,250).

e) To earn a normal profit, the café would have to cover all its implicit and explicit costs. The opportunity cost of John's time is $1,000 per year while the café's accounting profit is only $750 per year. Thus, the café would have to earn additional revenues of $250 per year in order for John to make a normal profit.

8 0
2 years ago
A publisher for a promising new novel figures fixed costs​ (overhead, advances,​ promotion, copy​ editing, typesetting, and so​
alisha [4.7K]

Answer:

5,409 books

Explanation:

to calculate break even point in units we can use the following formula:

break even point in units = total fixed costs / contribution margin per unit

  • total fixed costs = $53,000
  • contribution margin per unit = sales price - variable costs = $12 - $2.20 = $9.80

break even point in units = $53,000 / $9,80 = 5,408.16 ≈ 5,409 books

in $, that would equal = 5,409 books x $12 per book = $64,908

5 0
3 years ago
Read 2 more answers
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