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3 years ago

The following direct materials and direct labor data pertain to the operations of Laurel Company for the month of August.

Business

1 answer:

Gekata [30.6K]3 years ago

7 0

Answer:

Results are below.

Explanation:

To calculate the direct material price, quantity, and total variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (193 - 190)*1,700

Direct material price variance= $5,100 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (1,680 - 1,700)*193

Direct material quantity variance= $3,860 unfavorable

Total variance= Direct material price variance +/- Direct material quantity variance

Total variance= 5,100 - 3,860

Total variance= $1,240 favorable

To calculate the direct labor efficiency, rate, and total variance; we need to use the following formulas:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (4,650 - 4,600)*14.5

Direct labor time (efficiency) variance= $725 favorable

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Direct labor rate variance= (14.5 - 15)*4,600

Direct labor rate variance= $2,300 unfavorable

Total variance= Direct labor time (efficiency) variance +/- Direct labor rate variance

Total variance= 725 - 2,300

Total variance= $1,575 unfavorable

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Use the information presented in Midwestern Mutual Bank's balance sheet to answer the following questions.

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Answer:

Answer for task 1: Increase

Answer for task 2: debt

Answer for task 3: -13.33

Answer for task 4: -14.00

Answer for task 5: reserve requirement

Explanation:

Task 1:

In the given question, the owner has borrowed $100 supplement to their existing reserves. Since the owner has borrowed, the value of debt would increase.

Task 2:

Leverage ratio before borrowing:

Leverage ratio = $\frac{Total assets}{Capital}$

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The leverage ratio before borrowing is - 13.33

Task 3:

Leverage ratio after borrowing:

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Leverage ratio = $\frac{2000 + 100}{-150}$

Leverage ratio = -14.00

The leverage ratio after borrowing is - 14.00

Task 4:

This would also bring the leverage ratio from its initial value of -13.33 to a new value of -14.00.

Task 5:

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