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1. Spragg Corporation is developing standards for its products. One product requires an input that is purchased for $62.00 per kilogram from the supplier. By paying cash, the company gets a discount of 6% off this purchase price. Shipping costs from the supplier's warehouse amount to $4.45 per kilogram. Receiving costs are $0.50 per kilogram. Each unit of output requires 0.48 kilogram of this input. The allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output. The allowance for rejects is 0.13 kilogram of this input for each unit of output. Required: a. Determine the standard price per kilogram of this input. Show your work! b. Determine the standard kilograms of this input per unit of output. Show your work!

10 . d.SH) = $6.5 x 400) = $240 F e.2. Materials quantity variance.$1. Lido Company's standard and actual costs per unit for the most recent period.4 x 400 . Direct labor rate variance. e. Materials price variance = AQ(AP . Direct labor efficiency variance.1 x 400) x ($1.4 x 400) x ($6. c. Variable overhead rate variance = AH(AR .SR) = (1. b.SQ) = $1.4 x 400 . Direct labor rate variance = AH(AR .50) = $84 U b.4 x 400) x ($3.50 . Variable overhead efficiency variance.SR) = (1. Show whether the variance is favorable (F) or unfavorable (U): a.60 .1.1 x 400 . a.$3.5 x 400) = $136 F .$6.00) = $280 U d.SP) = (2. Materials quantity variance = SP(AQ .00(1. f.40) = $168 F f. Variable overhead rate variance. Variable overhead efficiency variance = SR(AH .50(2. during which 400 units were actually produced. Materials price variance. Direct labor efficiency variance = SR(AH .0 x 400) = $60 U c. compute the following variances.SH) = $3.2.40(1. are given below: Required: From the foregoing information.1.

0 days . MCE = Value-added time (Process time) = 2.8 days + 0.3. queue time was 3.2 days = 0.8 days.8 days + 7. and move time was 0. Throughput time = Process time + Inspection time + Move time + Queue time = 2. inspection time was 0.8 days 7. Delivery cycle time = Wait time + Throughput time = 11. Required: a.39 Throughput time c.8 days.8 days + 0. During the most recent month at Hybarger Corporation.0 days.6 day. c. Compute the manufacturing cycle efficiency (MCE). Compute the delivery cycle time.6 days + 3.2 days = 19. a.0 days = 7. Percentage of time spent on non-value-added activities = 100% . b.MCE% = 100% .2 days b.8 day. wait time was 11. What percentage of the production time is spent in non-value-added activities? d. process time was 2.39% = 61% d. Compute the throughput time.

Financial data for Beaker Company for last year appear below: The company paid dividends of $2. b.100 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company. turnover. What was the company's residual income last year? . Compute the company's margin. and return on investment for last year. Required: a.4. The Board of Directors of Beaker Company has set a minimum required return of 20%.

000 $414. Average operating assets = ($220.760 .000 = $13.2% b. Ferro Wares is a division of a major corporation.18% x $8.a.000 = 15% $230.000 = 1.000 + $240. Operating assets do not include investments in other companies or in undeveloped land.000 = 18.760 .760 $8.Minimum required rate of return x Average operating assets = $1. The following data are for the latest year of operations: Required: a.453.8 = 27% 5.8 Average operating assets = $414.000. Residual income = Net operating income .100 2 = $230.453. What is the division's return on investment (ROI)? b.000) Margin = Net operating income Turnover = Sales Sales = $62.000. What is the division's residual income? a. ROI = Net operating income Average operating assets = $1.000 ROI = Margin x Turnover = 15% x 1.

Costs associated with the alternatives are listed below: Required: a. Which costs are relevant and which are not relevant in the choice between these two alternatives? b.6.Chapter 013 Learning Objective: 1 Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 5 Level: Easy Level: Medium # of Questions 6 6 6 3 2 1 2 3 3 1 1 3 3 . What is the differential cost between the two alternatives? Quiz 5 Summary Category AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Garrison .Chapter 012 Garrison .Chapter 011 Garrison . Rackett Corporation is considering two alternatives that are code-named M and N.

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