Senocot Corporation Uses Two Different Types of Labour to Manufacture

question 24

Essay

Senocot Corporation uses two different types of labour to manufacture its product.The types of labour,Assembly and Finishing,have the following standards:
$\begin{array}{llrl}\text { Labour Type}&\text { Standard Mix }&\text { Standard Unit Price}&\text { Standard Cost}\\\text { Assembly } & 800 \text { hours } & \$ 12.00 \text { per unit } & \$ 9,600 \\\text { Finishing } & 200 \text { hours } & 8.00 \text { per unit } & \$ 1,600 \\& & &\\\text { Yield }&5000 \text { units }\end{array}$ During January,the following actual production information was provided:
$$\begin{array} { l l } \text { Labour Type } & \text { Actual Mix } \\\hline \text { Assembly } & 7,000 \text { hours } \\\text { Finishing } & 3,000 \text { hours } \\\\\text { Yield } & 45,000 \text { units }\end{array}$$ Calculate the labour efficiency and mix and yield variances.

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Definitions:

Service Department

A service department refers to a division within a company that provides support services to other departments, rather than producing goods.

Transfer Price

The price at which goods or services are transferred between departments or affiliated entities within the same organization.

Divisional Managers

Managers who are responsible for overseeing and directing a division within a company, typically with responsibility for profit and loss.

Profit Centers

Segments within a company that are responsible for generating revenue and profit, often evaluated separately to analyze their performance.