Built Rite produces suitcases. The following are the results of last month’s production.

REQUIRED:

a. Using the table- based approach pictured in Table 7.7, decompose the variances for the month into price and usage variances. Do this for every cost element in the table.

b. How does performance for the month look? Explain your reasoning.

Table 7.7

Transcribed Image Text:

Built Rite Products-Suitcase Results Standard cost estimates Actual results Amount Standard allowed Materials Standard rate cost Actual rate Amount used Actudl cost Plastic S150 per pound 4 pounds $6.00 S140 per pound 4.2pounds $5.88 Hinges S0.50 per hinge 2 $1.00 $0.60 per hinge 2 each $1.20 Coth lining $300 per yard 2 yards $6.00 $2.75 per yard 24 yards $6.60 Elastic $150 per yard lyard $1.50 S175 per yard lyard $1.75 Straps $200 per yard 2 yards $4.00 $225 per yard 2 yards $4.50 Wheels $2.50 per set 2 sets $5.00 $225 per set 2 sets $4.50 Handles S0.50 per handle 2 each $1.00 S0.60 per handle 2 each $1.20 Rolling handle mechanism $5.00 per mechanism leach $5.00 S4.50 per mechanism leach $4.50 Total materials at standard $29.50 Adual materials $30.13 Conversion and other activities Standard Standard cost Standard rute Actual cost Activity Mold plastic amount Actud rate Amount used S30.00 per hour 2 minutes $1.00 SZ7.00 per hour 3minutes $1.35 Assemble suitcase $E00 per hour 5minutes $1.25 SER00 per hour 4 minutes $1.20 Set up SAB.00 per hour D minutes $8.00 SA500 per hour 2minutes $9.00 Kit materials $5.00 per kit 2 kits $10.00 $5.50 per kit 2 kits $11.00 Inspection $R00 per hour 3minutes $0.90 SK00 per hour 4 minutes $1.00 Packaging $E.00 per hour 2minutes $0.50 $K.00 per hour 3minutes $0.80 Standard conversion and activities $21.65 Actual materials $24.35 Total standard cost $51.15 Total actual cost $54.48