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The document provides information about A.Xtra Klean, a company that manufactures cleaning solvent. It employs skilled and unskilled workers at hourly rates of $12 and $7 respectively. To produce one 55-gallon drum requires 4 hours of skilled labor and 2 hours of unskilled labor. The document includes standard and actual material and labor information and asks questions to calculate variances. It also provides information about Valentine Manufacturing and its standard and actual direct labor rates and hours to calculate additional variances.

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Samuel Ferolino
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122 views2 pages

Name Cost

The document provides information about A.Xtra Klean, a company that manufactures cleaning solvent. It employs skilled and unskilled workers at hourly rates of $12 and $7 respectively. To produce one 55-gallon drum requires 4 hours of skilled labor and 2 hours of unskilled labor. The document includes standard and actual material and labor information and asks questions to calculate variances. It also provides information about Valentine Manufacturing and its standard and actual direct labor rates and hours to calculate additional variances.

Uploaded by

Samuel Ferolino
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: __________________________________

A.Xtra Klean manufactures a cleaning solvent. The company employs both skilled and unskilled workers.
Skilled workers class C are paid $12 per hour, while unskilled workers class D are paid $7 per hour. To
produce one 55-gallon drum of solvent requires 4 hours of skilled labor and 2 hours of unskilled labor.
The solvent requires 2 different materials: A and B. The standard and actual material information is
given below: (Round all answers to the nearest dollar and percents to the nearest whole percent.)

Standard:

Material A: 30.25 gallons @ $1.25 per gallon

Material B: 24.75 gallons @ $2.00 per gallon

Actual:

Material A: 10,716 gallons purchased and used @ $1.50 per gallon

Material B: 17,484 gallons purchased and used @ $1.90 per gallon

Skilled labor hours: 1,950 @ $11.90 per hour

Unskilled labor hours: 1,300 @ $7.15 per hour

During the current month Xtra Klean manufactured 500 55-gallon drums. (Round all answers to the
nearest whole dollar.)

1.What is the total material price variance?_________________

2.What is the total material mix variance?_________________

3.What is the total material yield variance?_________________

4.What is the labor rate variance?_________________

5.What is the labor mix variance?_________________

6.What is the labor yield variance?_________________

B.Valentine Manufacturig Co. has a process cost accounting system. A monthly analysis compares actual
results with both a monthly plan and a flexible budget. Standard direct labor rates used in the flexible
budget are established at the time the annual plan is formulated and held constant for the entire year.

Standard direct labor rates in effect for the fiscal year ending June 30 and standard hours allowed for
the output in April are:
 

Standard DLStandard DLH

Rate per hourAllowed for output

Labor class IIIP8500

Labor class IIP7500

Labor class IP5500

The wage rates for each labor class increased on January 1 under the terms of a new union contract
negotiated in December of the previous fiscal year. The standard wage rates were not revised to reflect
the new contract.

The actual direct labor hours worked and the actual direct labor rates per hour experienced for the
month of April were as follows:

Actual directActual direct

Labor rate per hourLabor hours

Labor class IIIP8.50550

Labor class IIP7.50650

Labor class IP5.40375

 What is the total direct labor variance?_________________

 The direct labor rate variance is_________________

 The direct labor efficiency variance is_________________

 What is the labor yield variance for Valentine in April?_________________

 What is the labor mix variance for Valentine in April?_________________

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