DES Company manufactures folding chairs. Direct materials include hard plastic for the seat and back and...
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DES Company manufactures folding chairs. Direct materials include hard plastic for the seat and back and metal beams for the legs. The standard cost sheet for a single chair includes the following direct materials information: Material Hard plastic Metal beams Quantity 2 sheets 4 beams Cost per Unit $ 2.67 per sheet $ 1.20 per beam Total Cost $ 5.34 4.80 $ 10.14 Last month, DES purchased 40,400 sheets of hard plastic at a cost of $100,596. The company also purchased 80,700 metal beams at a cost of $105,717. DES produced 20,250 chairs. There was no beginning or ending inventory of plastic sheets or metal beams during the month. Required: 1. Compute the following for last month's operations at DES Company: a. The price variance for hard plastic. Indicate whether the variance is favorable or unfavorable. b. The price variance for metal beams. Indicate whether the variance is favorable or unfavorable. c. The total direct materials price variance. Indicate whether the variance is favorable or unfavorable. d. The usage variances for hard plastic and metal beams, and the total direct materials usage variance. Indicate whether each variance is favorable or unfavorable. DES Company manufactures folding chairs. Direct materials include hard plastic for the seat and back and metal beams for the legs. The standard cost sheet for a single chair includes the following direct materials information: Material Hard plastic Metal beams Quantity 2 sheets 4 beams Cost per Unit $ 2.67 per sheet $ 1.20 per beam Total Cost $ 5.34 4.80 $ 10.14 Last month, DES purchased 40,400 sheets of hard plastic at a cost of $100,596. The company also purchased 80,700 metal beams at a cost of $105,717. DES produced 20,250 chairs. There was no beginning or ending inventory of plastic sheets or metal beams during the month. Required: 1. Compute the following for last month's operations at DES Company: a. The price variance for hard plastic. Indicate whether the variance is favorable or unfavorable. b. The price variance for metal beams. Indicate whether the variance is favorable or unfavorable. c. The total direct materials price variance. Indicate whether the variance is favorable or unfavorable. d. The usage variances for hard plastic and metal beams, and the total direct materials usage variance. Indicate whether each variance is favorable or unfavorable.
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To compute the variances we need to compare the actual costs with the standard costs a The price variance for hard plastic Standard cost for hard plas... View the full answer
Related Book For
Operations Management in the Supply Chain Decisions and Cases
ISBN: 978-0073525242
6th edition
Authors: Roger Schroeder, M. Johnny Rungtusanatham, Susan Goldstein
Posted Date:
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