7.27 Deviations of raw materials and production work, standard costs. The following selective data are given on a production line of padded seats: Standard values per seat Direct raw materials Direct production work 2 m of raw material at $10 per m 0.5 hours of work at $20 per hour The following data were compiled on the actual results: actual production-20,000 units (chairs); raw materials purchased and used -37,000 m; raw material price - $10,20/m²; direct cost of production work $176,400; the actual number of hours of direct work - 9,000; direct labor price- $19.60/time. 1. Present the calculations of price and efficiency deviations of direct raw materials and direct production work. Provide a plausible explanation of the causes that caused these deviations. 2. Suppose that 60,000 m² of raw materials were bought (at the price of $10.20/mf), although only 37,000 m. Let us assume, moreover, that the deviations are identified at the control point most likely; consequently, the price deviations of direct raw materials are separated and tracked by the supply department and not by the production department. Calculate price and efficiency deviations under these conditions.
7.27 Deviations of raw materials and production work, standard costs. The following selective data are given on a production line of padded seats: Standard values per seat Direct raw materials Direct production work 2 m of raw material at $10 per m 0.5 hours of work at $20 per hour The following data were compiled on the actual results: actual production-20,000 units (chairs); raw materials purchased and used -37,000 m; raw material price - $10,20/m²; direct cost of production work $176,400; the actual number of hours of direct work - 9,000; direct labor price- $19.60/time. 1. Present the calculations of price and efficiency deviations of direct raw materials and direct production work. Provide a plausible explanation of the causes that caused these deviations. 2. Suppose that 60,000 m² of raw materials were bought (at the price of $10.20/mf), although only 37,000 m. Let us assume, moreover, that the deviations are identified at the control point most likely; consequently, the price deviations of direct raw materials are separated and tracked by the supply department and not by the production department. Calculate price and efficiency deviations under these conditions.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
Related questions
Question
Can you help me with the 7.27 question? Thanks in advance.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College