Part A. The following data relate to direct materials costs for February: Materi
ID: 2534532 • Letter: P
Question
Part A. The following data relate to direct materials costs for February:
Materials cost per yard: standard, $1.90; actual, $2.05
Standard yards per unit: standard, 4.68 yards; actual, 5.11 yards
Units of production: 9,200
Calculate the direct materials quantity variance.
a.$7,516.40 favorable b.$8,109.80 unfavorable c.$7,516.40 unfavorable d.$8,109.80 favorable
Part. B
Falcon Co. produces a single product. Its normal selling price is $27 per unit. The variable costs are $16 per unit. Fixed costs are $20,400 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,660 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated.
If the order is accepted, what would be the impact on net income?
a.decrease of $5,976 b.increase of $7,968 c.increase of $12,948 d.increase of $9,960
The standard costs and actual costs for factory overhead for the manufacture of 2,500 units of actual production are as follows:
The amount of the total factory overhead cost variance is
a.$3,125 unfavorable b.$4,975 unfavorable c.$4,975 favorable d.$6,825 favorable
Standard Costs Fixed overhead (based on 10,000 hours) 3 hours per unit @ $0.74 per hour Variable overhead 3 hours per unit @ $1.97 per hourActual Costs Total variable cost, $17,900 Total fixed cost, $8,100
Explanation / Answer
part-A: Answer is c. $ 7516.40 unfav Explanation: Material Quantity variance: Std price (Std quantity f or actual output -Actual qty used) 1.90 ((9200 units*4.68)-(9200*5.11)) = $ 7516.40 Unfav Part-B: Answer is d. Increase of $ 9960 Explanation:; Financial Advantage/Disadvantage of order: Incremental revenue (1660 units @20) 33200 Less: Incremental cost Variable cost (1660 units @ 14) 23240 Financial advantage of order 9960