PROBLEM #1

Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The standard costs for one unit of product are as follows:

Direct material: 6 ounces at $0.50 per ounce . . . . . . . . . . . . . . . . . . $3

Direct labor: 1.8 hours at $10 per hour . . . . . . . . . . . . . . . . . . . . . . . 18

Variable manufacturing overhead: 1.8 hours at $5 per hour . . . . . . . 9

Total standard variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . $30

During June, 2,000 units were produced. The costs associated with June's operations were as follows:

Material purchased: 18,000 ounces at $0.60 per ounce . . . . . . . $10,800

Material used in production: 14,000 ounces . . . . . . . . . . . . . . . . .

Direct labor: 4,000 hours at $9.75 per hour . . . . . . . . . . . . . . . . . $39,000

Variable manufacturing overhead costs incurred . . . . . . . . . . . . . $20,800

Required:

Compute the direct materials, direct labor, and variable manufacturing overhead variances.

PROBLEM #2

Novex Company keeps careful track of the time to complete customer orders. During the most recent quarter, the following average times were recorded for each unit or order:

Days

Wait time . . . . . . . . . . . . 17.0

Inspection time . . . . . . . . 0.4

Process time . . . . . . . . . .2.0

Move time . . . . . . . . . . . .0.6

Queue time . . . . . . . . . . .5.0

Goods are shipped as soon as production is completed.

Required:

1. Compute the throughput time.

2. Compute the manufacturing cycle effi ciency (MCE).

3. What percentage of the production time is spent in non-value-added activities?

4. Compute the delivery cycle time.