Question

Texts: business as A and B. Two types of labor are required also. These are mixers (labor class I) and packers (labor class II). You were recently hired by the company president, Pete Thorn, to be the controller. You soon learned that MacGyver uses a job. You gathered the necessary data to compute the month's variances for direct material and direct labor. You finished everything up by 5:00 p.m. on the 31st, including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presentation to Thorn first thing in the morning. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way. You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it, unfortunately, obliterated most of your notes. All that remained legible is the following information. Direct Material A: Quantity Variance 2,600 Direct Material B: Purchase Price Variance 1,000 Direct Labor I: Rate Variance 4 Direct Labor II: Efficiency Variance 1,100 Cost of Goods Sold 135,001.76 Accounts Payable 1,700 Beg. bal. 65,000 75,000 11,700 End. bal. Other assorted data gleaned from your notes: The standards for each drum of Miracle Goo include 10 pounds of material A at a standard price of $5 per pound. The standard cost of material B is $16 for each drum of Miracle Goo. Purchases of material A were 12,000 pounds at $4.50 per pound. Given the actual output for the month, the standard allowed quantity of material A was 9,000 pounds. The standard allowed quantity of material B was 7,200 gallons. Although 10,000 gallons of B were purchased, only 7,000 gallons were used. The standard wage rate for mixers is $16 per hour. The standard labor cost per drum of product for mixers is $48 per drum. The standards allow 5 hours of direct labor II (packers) per drum of Miracle Goo. The standard labor cost per drum of product for packers is $55 per drum. Packers were paid $10.90 per hour during the month. You happened to remember two additional facts. There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to direct-material purchases only. Meeting with the president. You start by making the following list of the facts you want to use in your presentation. Before Miracle Goo. Case 10-50 Part 1 Required: Compute the following: 1. Actual output in drums Actual output: drums

Texts: business as A and B. Two types of labor are required also. These are mixers (labor class I) and packers (labor class II). You were recently hired by the company president, Pete Thorn, to be the controller. You soon learned that MacGyver uses a job. You gathered the necessary data to compute the month's variances for direct material and direct labor. You finished everything up by 5:00 p.m. on the 31st, including the credit to Cost of Goods Sold for the sum of the variances. You decided to take all your notes home to review them prior to your formal presentation to Thorn first thing in the morning. As an afterthought, you grabbed a drum of Miracle Goo as well, thinking it could prove useful in some unanticipated way.

You spent the evening boning up on the data for your report and were ready to call it a night. As luck would have it, unfortunately, obliterated most of your notes. All that remained legible is the following information.

Direct Material A: Quantity Variance 2,600
Direct Material B: Purchase Price Variance 1,000
Direct Labor I: Rate Variance 4
Direct Labor II: Efficiency Variance 1,100
Cost of Goods Sold 135,001.76
Accounts Payable 1,700 Beg. bal. 65,000 75,000 11,700 End. bal.

Other assorted data gleaned from your notes:
The standards for each drum of Miracle Goo include 10 pounds of material A at a standard price of $5 per pound. The standard cost of material B is $16 for each drum of Miracle Goo. Purchases of material A were 12,000 pounds at $4.50 per pound. Given the actual output for the month, the standard allowed quantity of material A was 9,000 pounds. The standard allowed quantity of material B was 7,200 gallons. Although 10,000 gallons of B were purchased, only 7,000 gallons were used. The standard wage rate for mixers is $16 per hour. The standard labor cost per drum of product for mixers is $48 per drum. The standards allow 5 hours of direct labor II (packers) per drum of Miracle Goo. The standard labor cost per drum of product for packers is $55 per drum. Packers were paid $10.90 per hour during the month.

You happened to remember two additional facts. There were no beginning or ending inventories of either work in process or finished goods for the month. The increase in accounts payable relates to direct-material purchases only.

Meeting with the president. You start by making the following list of the facts you want to use in your presentation. Before Miracle Goo.

Case 10-50 Part 1

Required: Compute the following:

1. Actual output in drums
Actual output: drums