Problem 1. Aborkian Co. is forecasting sales of 75,000 units of product for November. To make one unit of finished product, seven pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are:
November 1 November 30
(Actual) (Desired)
Raw materials (pounds) 91,400 86,400
8,500 9,600
Calculate the number of units of product to be produced during November.
Problem 2. The April Corporation developed the following per-unit standards for its product: 2 pounds of direct materials at $3.75 per pound. Last month, 2,000 pounds of direct materials were purchased for $7,600. What was the direct materials price variance for last month. Is it favorable or unfavorable?
Problem 3. The cost formula for the maintenance department of the Eifel Co. is $6,500 per month plus $3.50 per machine hour used by the production department. Calculate the maintenance cost that would be budgeted for the month of May in which 5,700 machine hours are planned to be used.