Haley's Boiled Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure...
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Haley's Boiled Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Haley has a rigorous inspection process For quality control purposes, Haley has a standard based on the number of pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Haley expects that for every 6,000 pounds of chips produced, 1,200 pounds of chips will be inspected. Inspection of 1,200 pounds of chips should take 1 hour. Haley also expects that 2% of the chips inspected will fail the inspection. During the month of May, Haley produced 1,320,000 pounds of chips and inspected 270,000 pounds of chips in 230 hours. Of the 270,000 pounds of chips inspected, 4,800 pounds of chips failed to pass the inspection. Requirements 1. Compute two variances that help determine whether the time spent on inspections was more or less than expected. (Follow a format similar to the one used for the variable overhead spending and efficiency variances, but without prices.) 2. Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection. Haley's Boiled Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Haley has a rigorous inspection process For quality control purposes, Haley has a standard based on the number of pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Haley expects that for every 6,000 pounds of chips produced, 1,200 pounds of chips will be inspected. Inspection of 1,200 pounds of chips should take 1 hour. Haley also expects that 2% of the chips inspected will fail the inspection. During the month of May, Haley produced 1,320,000 pounds of chips and inspected 270,000 pounds of chips in 230 hours. Of the 270,000 pounds of chips inspected, 4,800 pounds of chips failed to pass the inspection. Requirements 1. Compute two variances that help determine whether the time spent on inspections was more or less than expected. (Follow a format similar to the one used for the variable overhead spending and efficiency variances, but without prices.) 2. Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection.
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Answer 1 Actual hours for inspection 230 hours Actua... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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