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ACCT 386 - Week 6 - Homework - Question 4

ACCT 386 - Week 6 - Homework - Question 4
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ACCT 386 - Week 6 - Homework - Question 4

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Question 4

Monte Rosa Corporation produces two products, Alpha8s and Zeta9s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials, X342 and Y561. The company uses a standard cost system, with the following standards for each product (on a per unit basis):

 

Raw Material

 

Standard Labor Time

Product  

X342

Y561

 

Sintering

Finishing

    Alpha8

1.6 kilos

2.2 liters

 

0.20 hours

0.80 hours

    Zeta9

2.6 kilos

4.2 liters

 

0.35 hours

0.90 hours


Information relating to materials purchased and materials used in production during May follows:

Material

Purchases

Purchase Cost

Standard
Price

Used in
Production

    X342

13,000 kilos

$48,100

$3.5

 per kilo

8,500

 kilos

    Y561

19,000 liters

$20,900

$1.2

 per liter

14,000

 liters


The following additional information is available:

a.

The company recognizes price variances when materials are purchased.

b.

The standard labor rate is $18 per hour in Sintering and $17 per hour in Finishing.

c.

During May, 1,200 direct labor-hours were worked in Sintering at a total labor cost of $24,600, and 2,820 direct labor-hours were worked in Finishing at a total labor cost of $53,580.

d.

Production during May was 1,500 Alpha8s and 2,000 Zeta9s.