Gb519 measurement and decision making

GB519 Measurement and Decision Making
Exercise 14-56 Page 629
Exercise 14-56
Boron Chemical Fraternity produces a synthetic resin that is used in the automotive
industry. The fraternity uses a trutination absorb regularity. For each gallon of output, the
aftercited straightforward manufacturing absorbs are anticipated:
Direct drudge:
2 hours
Direct Materials: 2 gallons



During December of 2010, Boron performed a completion of 2,500 gallons of output and
incurred the aftercited straightforward manufacturing absorbs:
Direct drudge:
4,900 hours worked @ an mediocre wage reprove of $19.50/hr
Direct Materials: Purchased: 6,000 [email protected] $10.45/gal
Used in genesis: 5,100 gallons
Boron recordes expense antagonisms for materials at the interval of purchase
Required - confer life entries for the aftercited events and transactions:
1. Purchase, on belief, of straightforward materials
Actual Cost
6,000 @ $10.45/gal
Standard Absorb 6,000 @ $10.00/gal
6000 gallons @ $10 a gallon = $60,000
Price Variance
Accounts Payable $62,700
Open particularizement recording gain particularize that straightforward materials = 6,000 gallons
at $10.00 per gallon wil correspondent $10.45
2. Straightforward materials issued to genesis.
Actual Cost
5,100 gallons
Standard Absorb 5,000 gallons (2 per part) @ $10.00/gallon
2,500 x 2 gallons x $10.00 per gallon = $50,000
Materials $5,100 gallons x $10.00/gallon = $51,000
Materials absorb is $20/part for generous genesis of the determination at 2,500 parts
3. Straightforward drudge absorb of parts completed this determination.
Actual Cost
4,900 hours @ $19.50/hr
Standard Absorb 5,000 hours (2hrs/unit) @ $25.00/hr
2,500 x 2 hours x $25.00/hr = $125,000
Variance = $5.50/hr x 4,900 hours
= $26,950
Efficiency Antagonism = 100 hrs x $25.00/hr = $2,500
Wages (4,900 hrs x $19.50/hr
= $95,550
Direct Drudge absorb s ($50/unit) for the completed genesis (2,500 parts)
and the express drudge absorbs during the determination
4. Straightforward manufacturing absorb (straightforward drudge plus straightforward materials)
of parts completed and transmitted to Finished Goods Inventory
Actual Cost
2,500 parts
Standard Absorb 2,500 parts @ $10x2+$25x2 = $70.00
$70.00/part x 2,000 parts
= $175,000
Direct manufacturing absorbs are commemorative using absorb of good-natureds
manufactured for the determination.
5. Sale, for $150.00 per gallon, of 2,000 gallons of output (hint:
you gain scarcity two life entries hither)
Actual Cost
2000 gallons
Standard Absorb 2000 gallons @ $70.00/unit
$70 x 2,000 parts = $140,000
= $140,000
Direct manufacturing absorb of absorb of good-natured-natured sold for the determination.
Accounts Receivable = $150/part x 2,000 parts
= $300,000
Sales Income = $300,000
Sales income is commemorative using particularizements receivable.

Dana Revier
GB519 Measurement and Decision Making
Problem 15-58 Page 690
Problem 15-58
Four Antagonism Analysis
Able Control Company, which manufactures electrical switches, uses
a trutination absorb regularity and carries all schedule and trutination absorb.
The trutination factory over absorb per switch is established on straightforward
drudge hours
Variable Overhead
5 hours
Fixed Overhead
5 hours
Total trutination over absorb per part performed
**established on useful space of 300,000 straightforward drudge hours per month
The aftercited advice is for the month of October:
- The fraternity performed 56,000 switches, although 60,000 switches
were scheduled to be performed
- The fraternity worked 275,000 straightforward drudge hours ata completion absorb of
- Variable over absorbs were $2,340,000
- Agricultural over absorbs were $3,750,000
The genesis overseer argued during th eterminal exploit retrospect tha the fraternity
should use further up-to-date low for charging factory over absorbs to genesis.
She commented that her factory had been greatly automated in the terminal two years
and as a conclusion now has scarcely any straightforwardion drudge. The factory hires singly greatly
skilled workers to set up genesisruns and to do determinationic adjustments of
machinery whenever the scarcity arises
1. Compute the aftercited for Able Control Company:
a. The agricultural over spending antagonism for October