Gemma Products Produces and Sells a Variety of Domestic Goods

question 29

Essay

Gemma Products produces and sells a variety of domestic goods including sheets. In the current year, the company budgeted for the production and sale of 10,000 sets; however, 12,000 sets were actually produced and sold. Each set has a standard requiring 10 yards of material at a cost of $1.10 per yard and 20 minutes of direct labor (for sewing, assembly, and inspection) at a cost of $.20 per minute. Actual costs for the production of 12,000 sets were $138,240 for materials (128,000 yards purchased and used @ $1.08 per yard) and $55,200 for labor (230,000 minutes @ $.24 per minute).
Required: Compute each of the following variances. Indicate whether the variance is favorable (F) or unfavorable (U).

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Definitions:

Placenta

The principal organ of exchange between the mother and the developing organism, enabling the exchange of nutrients, oxygen, and wastes via the umbilical cord.

Amnion

A membrane that holds amniotic fluid.

Umbilicus

also known as the navel or belly button, is the scar on the abdomen resulting from the detachment of the umbilical cord following birth.

Mesoderm

The middle layer of an embryo in early development, between the endoderm and ectoderm, which develops into muscles, bones, and circulatory systems.