Question

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Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing...

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 90 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
Standard wage per hr. Standard labor time per faucet Standard number of lb. of brass Standard price per lb. of brass Actual price per lb. of brass Actual lb. of brass used during the week Number of faucets produced during the week Actual wage per hr. Actual hrs. for the week
$15.00 40 min. 3 lb. $2.40 $2.50 14,350 lb. 4,800 $14.40 3,240 hrs.
Instructions
Determine (a) the standard cost per unit for direct materials and direct labor; (b) the di- rect materials price variance, direct materials quantity variance, and total direct materials cost variance; and (c) the direct labor rate variance, direct labor time variance, and total direct labor cost variance.

Solutions

Expert Solution

a SC per unit for direct materials:
Standard unit 3 Lbs.
Standard price $ 2.40
Standard cost 7.2
SC per unit for DL
SL time per faucet (Hours) = 40/60 0.666667 Hours
SW per hour. $ 15
SC per unit for DL $ 10
b DMPV = (AP - SP)* AQ
AP $ 2.50
SP $ 2.40
AQ 14350
Direct materials price variance ((2.5-2.4)*14350) 1435 Unfavorable
DMQV = (AQ - SQ)* SP
Actual Quantity 14350
SQ = Number of faucets produced * Standard number of lbs. of brass (4800*3) 14400
Standard Price $ 2.40
DMQV ((14350-14400)*2.4) -120 Favorable
Total DMCV:
DMPV 1435 Unfavorable
DMQV 120 Favorable
Total DMCV: 1315 Unfavorable
c Direct labor rate variance: (SR - AR)* AH = ($15 - $14.40) * 3240 1944 Favorable
Direct labor time variance: (SH - AH) * SR = (3200 - 3240) * 15 600 Unfavorable
Total direct labor cost variance: Labor rate variance + Labor time variance = $1,944 (F) + $600 (U) 1344 Favorable

ekkarill92 answered 8 months ago
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