Compute the manufacturing cycle efficiency-throughput time

Assignment Help Financial Accounting

Reference no: EM131205532

The Gibson Company has established standards as follows:

Direct material……………………. 3 pounds @ $4/pound - $12 per unit

Direct labor……………………….. 2 hours @ $8/hour - $16 per unit

Variable overhead………………... 2 hours @ $5/hour - $10 per unit

Actual production figures for the past year were as follows:

Units produced……………………………………… 500

Direct material used………………………………… 1,600 pounds

Direct material purchased (3,000 pounds)…………. $12,300

Direct labor cost (950 hours)………………………… $7,790

Variable overhead cost incurred……………………… $4,655

Required (be sure to indicate whether each variance is Favorable or Unfavorable):

a. What is the materials price variance?

b. What is the materials quantity variance?

c. What was the labor rate variance?

d. What was the labor efficiency variance?

e. What was the variable overhead rate variance?

f. What was the variable overhead efficiency variance?

2. Pence Corporation keeps careful track of the time required to fill orders. The times required for a particular order appear below:

Hours Wait time………………….. 14.0

Process time……………….. 0.6

Inspection time……………. 0.3

Move time…………………. 2.1

Queue time………………… 8.4

Required: a. Compute the delivery cycle time .

b. Compute the throughput time.

c. Compute the manufacturing cycle efficiency (MCE).

d. What percentage of the production time is spent on non-value added activities?

3. Linton Products is a division of a major corporation. The following data are for the last year of operations:

Sales……………………………………………………… $19,080,000

Net operating income……………………………………. $591,480

Average operating assets……………………………….... $6,000,000

The company’s minimum required rate of return………... 12%

Required: a. What is the division's margin?

b. What is the division's turnover?

c. What is the division's return on investment (ROI)?

d. What is the division's residual income?

Reference no: EM131205532

Questions Cloud

Savings account paying a guaranteed interest rate : Matt recently deposited $31,250 in a savings account paying a guaranteed interest rate of 5.5 percent for the next 10 years.(Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) A) If Matt expects his margin..

Equivalent units of production for materials-conversion cost : The following information is available for the month of April from the Second department of the Armque Corporation. Materials are added at the end of the process in the Second Department. Using the average cost method, what are the equivalent units o..

Types of problems with financial calculator : Having trouble learning how to solve these types of problems with a financial calculator. Consider a standard mortgage (360 months) with monthly payments and a nominal rate (monthly compounding) of 5.50%. What portion of the payments during the first..

Salaries and wages are paid every friday for current week : A review of the ledger of Baylor Company at December 31, 2014 produces the followingdate pertaining to the preparation of annual adjusting entries. Salaries and wages payable $0. There are eight employs. Salaries and wages are paid every Friday for c..

Compute the manufacturing cycle efficiency-throughput time : The Gibson Company has established standards as follows: What is the materials price variance? What is the materials quantity variance? Pence Corporation keeps careful track of the time required to fill orders. Compute the delivery cycle time . Comp..

What are equivalent units of production for the month : The following information is available for the month of October from the first department of the Vaughn Corporation. Materials are added in the beginning of the process in the First department. Using the average cost method, what are the equivalent u..

Certified public accountant-cash flows statement : You are a certified public accountant (CPA) and one of your clients has asked you to explain the statement of cash flows statement because the client's bank is requesting one. Explain this statement to the client and include a brief description of th..

Tax return problem : Tax Return Problem Brian and Corinne Lee are married taxpayers, filing jointly. They live in the home they own located at 3301 Pacific Coast Hwy, Laguna Beach, CA 92701. Brian is an optometrist who owns his own business and Corinne is a social worker..

Sales invoice is a type of source document : All of the following statements regarding a sales invoice are true except: A sales invoice is a type of source document. A sales invoice is used by sellers to record the sale and for control. A sales invoice is used by buyers to record purchases and ..

User Account

All Pages