Question:
Lupton Company manufactured two products, for simplicity called here A and B. Lupton used a standard cost system; were a flowchart of this system prepared, it would be identical to the How chart shown in Illustration 19-2. Thus, the price and usage components of the raw materials variance were captured in the accounts. However, decomposing the labor and production overhead variances required "outside-the-accounts" calculations, which Lupton's management performed on an ad hoc basis rather than routinely. Standards were used without change for the entire calendar year. All monthly variances were closed to the monthly income statement.
Question
Answer, with complete yet concise responses, the production manager's 17 questions.
Transcribed Image Text:
EXHIBIT 1 LUPTON COMPANY Gross Margin Statements For April and May April May Sales revenues Cost of sales at standard: $738,000 $553,500 Materials Direct labor Overhead 5196,800 184,500 147,600 5147,600 123,000 98,400 528,900 209,100 369,000 184,500 Gross margin at standard Production variances: Materials price Materials usage Labor Overhead (2,460) (1,230) (1,230) (55,360) (7.380) (3,690) (4,920) 18,460) (60,280) $148,820 (34 450) $150,050 Actual gross margin Supplementary Data 1. Debits to Work in Process for materials related to Product A totaled 535,055 and $31,365 in April and May, respectively. For Product B materials, these debits totaled $1,845 and $79,335, respectively. 2. The direct labor debited to Work in Process in March was $135,300. Budgeted production overhead for March was $102,090 3. April's and May's actual production overhead costs were equal. 4. May's actual production overhead costs were equal to the budgeted overhead at standard volume. 5. Product A's standard material cost per unit was $12.30; its full standard cost was $45.51.