Question

In: Accounting

The Comet Company's budget contains these standards for materials and direct labor for a unit: Material...

The Comet Company's budget contains these standards for materials and direct labor for a unit: Material 5 lbs. @ $1 per lb. = $5

Labor 2 hrs. @ $5 per hr. = $10

Although 2,500 units were budgeted, 3,000 were actually produced. Materials weighing 16,000 lbs. were purchased for $18,400. Materials weighing 15,500 lbs. were issued to production. Direct Labor costs were $33,075 for 6,750 hrs.

A.) What's the materials price variance?

B.) What's the materials quantity variance?

C.) What's the total material variance?

D.) What's the labor rate variance?

E.) What's the labor efficiency variance?

F.) What was the total labor variance?

Thanks! :)

Expert Solution

Material Price Variance	$ 2,325.00	Unfavourable-U
Material quantity variance	$ 500.00	Unfavourable-U
Total Material Variance	$ 2,825.00	Unfavourable-U

Labor rate variance	$ 675.00	Favourable-F
Labor Efficiency variance	$ 3,750.00	Unfavourable-U
Total Labor variance	$ 3,075.00	Unfavourable-U

Material variance alternate solution taking total material purchase instead of material used.

Material Price Variance

$ 2,400.00

Unfavourable-U

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$ 1.00	-	$ 1.15	)	x	15500
	-2325
	Variance		$ 2,325.00			Unfavourable-U

Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	15000	-	15500	)	x	$ 1.00
	-500
	Variance		$ 500.00			Unfavourable-U

Material Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$ 15,000.00	-	$ 17,825.00	)
	-2825
	Variance		$ 2,825.00			Unfavourable-U

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$ 5.00	-	$ 4.90	)	x	6750
	675
	Variance		$ 675.00			Favourable-F

Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	6000	-	6750	)	x	$ 5.00
	-3750
	Variance		$ 3,750.00			Unfavourable-U

Labor Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$ 30,000.00	-	$ 33,075.00	)
	-3075
	Variance		$ 3,075.00			Unfavourable-U

Standard DATA for		3000	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct Material	( 5 lbs x 3000 Units)=15000 lbs	$ 1.00	$ 15,000.00
Direct labor	( 2 hr x 3000 Units)=6000 hr	$ 5.00	$ 30,000.00

Actual DATA for		3000	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	15500	$ 1.15	$ 17,825.00
Direct labor	6750	$ 4.90	$ 33,075.00

Alternate solution workinh

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$ 1.00	-	$ 1.15	)	x	16000
	-2400
	Variance		$ 2,400.00			Unfavourable-U

ekkarill92 answered 7 months ago

The direct material and direct labor standards for one case of Springbreak Tonic are: Direct Materials...

The direct material and direct labor standards for one case of Springbreak Tonic are: Direct Materials (5 quarts @ $8 per quart) …………………… $40 Direct Labor (2 hours @ $12 per hour) ……………………….. 24 During the week ended March 7, the following activity took place: 16,000 quarts of raw materials were purchased for inventory at a cost of $8.10 per quart. 3,000 cases of finished product were produced. 14,700 quarts of raw material were used. 6,300 hours of direct labor...

A significant difference between the direct material purchases budget and the direct labor budget is that...

A significant difference between the direct material purchases budget and the direct labor budget is that the direct material purchases budget Group of answer choices is constructed for each quarter, while the direct labor budget is constructed for each pay period. considers beginning and ending inventory amounts, which are not part of the direct labor budget. is based on units sold, while the direct labor budget is based on units produced. is constructed from the top down, while the direct...

For Russell, Inc., direct materials standards are 5 pounds at $15 per pound, direct labor standards...

For Russell, Inc., direct materials standards are 5 pounds at $15 per pound, direct labor standards are 2 hours at $25 per hour, and variable overhead is applied at a rate of $50 per hour. Russell budgeted to manufacture and sell 280,000 units for $550 per unit, but actually manufactured and sold 300,000 units for total revenues of $163,000,000, spending $25,000,000 for 1,600,000 pounds of direct materials and $14,000,000 for 550,000 hours of direct labor. Fixed overhead was budgeted at...

12. The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour....

12. The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. If in producing 3400 units, the actual direct labor cost was $69750 for 4500 direct labor hours worked, the total direct labor variance is $2250 unfavorable. $6750 unfavorable. $6750 favorable. $3400 unfavorable. 13. A company purchases 10000 pounds of materials. The materials price variance is $7000 favorable. What is the difference between the standard and actual price paid for the materials? $1.43 $0.70 $7.00...

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given Standard Quantity or Hours Standard Priceor Rate StandardCost Direct materials 4.6 pounds $ 2.50 per pound $ 11.50 Direct labor 0.2 hours $ 18.00 per hour $ 3.60 During the most recent month, the following activity was recorded: Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. All of...

Evergreen, Inc., has the set the following standards for direct materials and direct manufacturing labor for...

Evergreen, Inc., has the set the following standards for direct materials and direct manufacturing labor for each 25-lb. bag of chemical fertilizer it produces: Per Bag Direct Materials: 31.25 pounds of XF/2000 @ $0.10 $3.125 Direct Labor: 0.0625 hours @ $40.00 per hour 2.500 The company had planned to produce 2,000,000 pounds of the fertilizer during February 2018, but manufactured 25% more fertilizer than planned, using 3,375,000 pounds of XF/2000 and 6,500 direct manufacturing labor hours. The...

Prepare GradyGrady's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round...

Prepare GradyGrady's direct materials budget, direct labor budget, and manufacturing overhead budget for the year. Round the direct labor hours needed for production, budgeted overhead costs, and predetermined overhead allocation rate to two decimal places. Round other amounts to the nearest whole number. Grady, Inc. manufactures model airplane kits and projects production at 650, 500, 450, and 600 kits for the next four quarters. First Quarter Second Quarter Third Quarter Fourth Quarter Total Direct materials (ounces) per kit Direct...

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per...

4).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses are $5 per unit and $10,000 per month. The company produced 900 units. Gross margin equals: a).$25,000 b).$40,500 c).$90,000 d).$10,500 5).Sales is $100 per unit; direct material is $25 per unit; direct labor is $15 per unit, overhead is $10 per unit and $20,000 per month; selling and administrative expenses...

Part A Sonne Company produces a perfume called Whim. The direct materials and direct labor standards...

Part A Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below: During the most recent month, the following activity was recorded: Standard Quantity or Hours Standards Price or Rate Standard Cost Direct Materials 7.2 ounces $2.50 per ounce $18.00 Direct Labor 0.4 ounces $10.00 per hour $4.00 During the most recent month, the following activity was recorded: a. Twenty thousand ounces of material were purchased at a...

Produce a direct materials budget with the following additional information. Units = 83,000 Direct material Cost...

Produce a direct materials budget with the following additional information. Units = 83,000 Direct material Cost Usage Steel $8.00/lb 12.100 oz/unit Plastic $3.50/lb 10.897 oz/unit What is the total direct materials cost? Note: lb = pound = 16 oz