Question;Exercise 5LIFT Elevator Company manufactures small hydroelectric elevators. One of the direct materials used is heavy-duty carpeting for the floor of the elevator. The direct materials quantity standard for May was 6 square yards per elevator. During May, the purchasing agent purchased this carpeting at $20 per square yard, the standard price for the period was $22. Fifty elevators were completed and sold during the month, the Production Department used an average of 6.5 square yards of carpet per elevator. Calculate the company?s direct materials price and quantity variances for carpeting for May.Exercise 6Creative Productions manufactured and sold 800 products at $10,000 each during the past year. At the beginning of the year, production had been set at 1,000 products, and direct materials standard had been set at 10 pounds of direct materials at $12 per pound for each product produced. During the year, the company purchased and used 7,900 pounds of direct materials with a cost of $12.02 per pound. Calculate the company?s direct materials price and quantity variances for the year.Problem 1- Computing and Using Standard CostsModular houses are Homes, Inc.?s specialty. The company?s best-selling model is a three-bedroom, 1,400-square-foot house with an impressive front entrance. Last year, the standard costs for the six basic direct materials used in manufacturing the entrance were as follows: wood framing materials, $2,140, deluxe front door, $480, door hardware, $260, exterior siding, $710, electrical materials, $580, and interior finishing materials, $1,520. Three types of direct labor are used to build the entrance: carpenter, 30 hours at $36 per hour, door specialist, 4 hours at $24 per hour, and electrician, 8 hours at $50 per hour. Last year, the company used an overhead rate of 40 percent of total direct materials cost.This year, the cost of wood framing materials is expected to increase by 20 percent, and a deluxe front door will cost $496. The cost of the door hardware will increase by 10 percent, and the cost of the electrical materials will increase by 20 percent. Exterior siding cost should decrease by $15 per unit. The cost of interior material finishing materials is expected to remain the same. The carpenter?s wages will increase by $1 per hour, and the door specialist?s wages should remain the same. The electrician?s wages will increase by $0.50 per hour. Finally, the overhead rate will decrease by 30 percent of total direct materials cost.REQUIRED:1. Compute the total standard cost of direct materials per entrance for last year.2. Using your answer to requirement 1, compute the total standard unit cost per entrance for last year.3. Compute the total standard unit cost per entrance for this year. (Round to the nearest dollar.)Exercise 9Web Services, a small company owned by Simon Orozco, provides web page service to small businesses. His services include the preparation of basic pages and custom pages. The following summary of information will be used to make several short-run decisions for Web Services:Basic Pages Custom PagesService revenue per page $200 $750Variable costs per page 77 600Contribution margin per page $123 $150Total annual fixed costs are $78,000.One of Web Services? two graphic designers, Taylor Campbell, is planning to take maternity leave in July and August. As a result, there will only be one designer available to perform the work, and design labor hours will be a resource constraint. Orozco plans to help the other designer complete the projected 160 orders for basic pages and 30 orders for custom pages for those 2 months. However, he wants to know which type of page Web Services should advertise and market. Although custom pages have a higher contribution margin per service, each customer page requires 12.5 design hours, whereas basic pages require only 1 hour per page. On which page type should his company focus? Explain your answer.Problem 4Common Chemical Company?s management is evaluating its product mix in an attempt to maximize profits. For the past two years, Common has produced four products, and all have large markets in which to expand market share. Common?s controller has gathered data from current operations and wants you to analyze them for him. Sales and operating data are as follows:Product A1Product B7Product C5Product D9Variable production costs$71,000$91,000$91,920$91,920Variable selling costs$10,200$5,400$12,480$12,480Fixed production costs$20,400$21,600$29,120$29,120Fixed administrative costs$3,400$5,400$6,240$6,240Total sales$122,000$136,000$156,400$156,400Units produced and sold85,00045,00026,00014,000Machine hours used*17,00018,00020,80016,800*Common?s scare resource, machine hours, is being used to full capacity.REQUIRED:1. Compute the machine hours needed to product one unit of each product.2. Determine the contribution margin per machine hour for each product.3. Which product line(s) should be targeted for market share expansion?
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