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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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A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price.
Yuki888 [10]

A company produces and sells a consumer product and is able to control the demand for the product by varying the selling price. The approximate relationship between price and demand is 50 units.

p = 38 + (2,700 / D) - (5,000 / D2)

Marginal (variable) cost (MC) = 40

(a) Profit is maximized by equality of Marginal revenue (MR) and MC.

Total revenue (TR) = p x D = 38D + 2,700 - (5,000 / D)

MR = dTR / dD = 38 + (5,000 / D2)

Equating MR with MC,

38 + (5,000 / D2) = 40

5,000 / D2 = 2

D2 = 2,500

Taking positive square root on each side,

D = 50

(b) When D = 50, from demand function we get

p = 38 + (2,700 / 50) - (5,000 / 2,500) = 38 + 54 - 2 = $90 (Profit-maximizing price)

Profit (\pi) ($) = Total Revenue - Total Costs = TR - (Fixed cost + Total variable cost) = (p x D) - (1,000 + 40D)

= 38D + 2,700 - (5,000 / D) - 1,000 - 40D

= 1,700 - 2D - (5,000 / D)

Profit is maximized when d\pi/dD = 0 and d2\pi/dD2 < 0.

First order condition: d\pi/dD = - 2 + (5,000 / D2)

Second order condition: d2\pi/dD2 = d/dD(d\pi/dD) = - 2 x (5,000 / D3) = - 10,000 / D3

Since D > 0, (- 10,000 / D3) < 0, which proves that profit is maximized when company produces = 50 units.

Learn more about the company products at

brainly.com/question/19649017

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