2. Owly Corporation's adhesives division makes and sells a reusable high strength and hold tape called...
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2. Owly Corporation's adhesives division makes and sells a reusable high strength and hold tape called Tape-Raculous. Each roll of Tape-Raculous sells for $10 and is 10 meters long. Tape- Raculous is made from compound PQ. The standard quantity of compound PQ to make a meter of tape is 100 grams. The standard direct labour time to make a roll of tape is 5 minutes. The static budget predicted sales of 15,000 rolls of tape for the month of March. Actual sales for March were 17,520 rolls of tape. Actual direct labour hours for March were 1,410 hours with a total cost of $30,174. The standard direct labour rate is $21 per hour. The standard price for compound PQ is $4.75 per kilogram. The actual amount of compound PQ used in March was 18,000 kilograms at a cost of $84,240. Net operating income for Tape-Raculous for March was $54,250. Owly Corporation's required rate of return is 16%. The Tape-Raculous average net operating assets for March were $310,000. A. Calculate the direct labour rate and efficiency variances in March. Label if Favourable or Unfavourable. B. Calculate the direct materials price and quantity variances in March. Label if Favourable or Unfavourable. C. What is the residual income for Tape-Raculous in March? D. What is the return on investment (ROI) for Tape-Raculous in March? 2. Owly Corporation's adhesives division makes and sells a reusable high strength and hold tape called Tape-Raculous. Each roll of Tape-Raculous sells for $10 and is 10 meters long. Tape- Raculous is made from compound PQ. The standard quantity of compound PQ to make a meter of tape is 100 grams. The standard direct labour time to make a roll of tape is 5 minutes. The static budget predicted sales of 15,000 rolls of tape for the month of March. Actual sales for March were 17,520 rolls of tape. Actual direct labour hours for March were 1,410 hours with a total cost of $30,174. The standard direct labour rate is $21 per hour. The standard price for compound PQ is $4.75 per kilogram. The actual amount of compound PQ used in March was 18,000 kilograms at a cost of $84,240. Net operating income for Tape-Raculous for March was $54,250. Owly Corporation's required rate of return is 16%. The Tape-Raculous average net operating assets for March were $310,000. A. Calculate the direct labour rate and efficiency variances in March. Label if Favourable or Unfavourable. B. Calculate the direct materials price and quantity variances in March. Label if Favourable or Unfavourable. C. What is the residual income for Tape-Raculous in March? D. What is the return on investment (ROI) for Tape-Raculous in March?
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PART A DIRECT LABOR RATE VARIANCE Direct Labor Rate Variance Actual Hours worked x Actual Rate Actual Hours worked x Standard Rate Direct Labor Rate V... View the full answer
Related Book For
Elementary Statistics A step by step approach
ISBN: 978-0073386102
8th edition
Authors: Allan Bluman
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