Canandaigua Container Company manufactures recyclable softdrink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the productionengineering staff and the controller. 
Direct Labor: 
Direct Material: 
Quantity, 0.17 hour 
Quantity, 8 kilograms 
Rate, $8.50 per hour 
Price, $0.44 per kilogram 

Actual material purchases amounted to 235,200 kilograms at $0.500 per kilogram. Actual costs incurred in the production of 24,000 units were as follows: 


Direct labor: 
$42,960 for 4,800 hours 
Direct material: 
$101,400 for 202,800 kilograms 

1. 
Use the variance formulas to compute the directmaterial price and quantity variances, the directmaterial purchase price variance, and the directlabor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.) 
During March, Manhattan Fabrics Corporation manufactured 570 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March. 




Direct material purchased: 18,700 yards at $1.45 per yard 
$ 
27,115 

Direct material used: 10,200 yards at $1.45 per yard 

14,790 

Direct labor: 2,800 hours at $9.22 per hour 

25,816 


The standard prime costs for one unit of Stylex are as follows: 




Direct material: 20 yards at $1.42 per yard 
$ 
28.40 

Direct labor: 4 hours at $6.00 per hour 

24.00 





Total standard prime cost per unit of output 
$ 
52.40 







1. Compute the following variances for the month of March. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). 
Directmaterial price variance
Directmaterial quantity variance
Directmaterial purchase price variance
Directlabor rate variance
Directlabor efficiency variance
Harrison Wolfe operates a residential landscaping business in an affluent suburb of Atlanta. In an effort to provide quality service, he has concentrated solely on the design and installation of upscale landscaping plans (e.g., trees, shrubs, fountains, and lighting). With his clients continually requesting additional services, Wolfe recently expanded into lawn maintenance, including fertilization. 
The following data relate to his first year’s experience with 59 fertilization clients. Each client required nine applications throughout the year and was billed $44.00 per application. 
• 
Two applications involved Type I fertilizer, which contains a special ingredient for weed control. The remaining seven applications involved Type II fertilizer. 
• 
Wolfe purchased 6,000 pounds of Type I fertilizer at $0.63 per pound and 11,000 pounds of Type II fertilizer at $0.50 per pound. Actual usage amounted to 4,660 pounds of Type I and 8,300 pounds of Type II. 
• 
A new, parttime employee was hired to spread the fertilizer. Wolfe had to pay premium wages of $12.50 per hour because of a very tight labor market; the employee logged a total of 185 hours at client residences. 
• 
Based on previous knowledge of the operation, articles in trade journals, and conversations with other landscapers, Wolfe established the following standards: 
Typical hourly wage rate of landscape personnel: $10.00 
Labor time per application: 40 minutes 
Fertilizer purchase price per pound: Type I, $0.60; Type II, $0.52 
Fertilizer usage: 50 pounds per application 
Unfortunately, Wolfe's new lawn fertilization service did not go as smoothly as planned, with customer complaints being much higher than expected. 
1. 
Compute Wolfe's directmaterial variances for each type of fertilizer. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round your answers to 2 decimal place.) 


2. 
Compute the directlabor variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations and round your final answers to 2 decimal place.) 
3a. 
Compute the actual cost of the client applications. (Note: Exclude any fertilizer in inventory, as remaining fertilizer can be used next year.) (Round your answer to 2 decimal place.) 
3b. 
Calculate the profit or loss of Wolfe's new lawn fertilization service. (Round your answer to 2 decimal place.) 
4. 
On the basis of the variances that you computed in parts (1) and (2) was the new service a success from an overall costcontrol perspective? (Round your answer to 2 decimal place.) 
The following data pertain to Colgate Palmolive's liquid filling line during the first 10 months of a particular year. The standard ratio of directlabor hours to machine hours is 4:1. The standard directlabor rate is $16.18. 
Colgate Palmolive: DirectLabor Efficiency Variance Data* 




Units 
Machine 
Standard 
Actual 
DirectLabor 

January 

50,698 


176.5 


706.00 


396.00 

$ 
5,016 

February 

32,163 


111.3 


445.20 


236.00 


3,385 

March 

186,279 


574.0 


2,296.00 


1,112.00 


19,157 

April 

214,474 


729.2 


2,916.80 


1,528.75 


22,459 

May 

49,490 


171.0 


684.00 


386.00 


4,822 

June 

83,206 


254.0 


1,016.00 


580.50 


7,046 

July 

36,648 


115.0 


460.00 


305.00 


2,508 

August 

33,923 


107.0 


428.00 


350.50 


1,254 

September 

32,110 


107.0 


428.00 


360.50 


1,092 

October 

28,741 


83.0 


332.00 


202.00 


2,103 


*Source of data: Alan S. Levitan and Sidney J. Baxendale, "Analyzing the Labor Efficiency Variance to Signal Process Engineering Problems," Journal of Cost Management 6, no. 2 (Summer 1992), p. 70. 
1. 
Calculate the following amounts. 
a. 
The standard directlabor cost for each of the 10 months. (Round intermediate calculation to 2 decimal places and final answers to nearest whole dollar amount.) 
b. 
For each month, (expression error) percent of the standard directlabor cost. (Round your final answers to the nearest whole dollar amount.) 
Gandolph Game Company has established the following standards for the prime costs of one unit of its chief product, dartboards. 

Standard Cost 
Standard Quantity 
Standard Price or Rate 

Direct material 
$ 
37.70 


13.00 
kilograms 
$ 
2.90 
per kilogram 
Direct labor 

29.40 


2.10 
hour 
$ 
14.00 
per hour 










Total 
$ 
67.10 


















During September, Gandolph purchased 263,000 kilograms of direct material at a total cost of $810,040. The total wages for September were $600,300, 90 percent of which were for direct labor. Gandolph manufactured 18,000 dartboards during September, using 225,000 kilograms of the direct material purchased in September and 41,400 directlabor hours. 
1. Compute the following variances for September. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).) 
Subject  Mathematics 
Due By (Pacific Time)  03/19/2014 12:00 am 
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