Question

In: Accounting

The following information pertains to the standard costs and actual activity for Repine Company for September:...

The following information pertains to the standard costs and actual activity for Repine Company for September:

Standard cost per unit:

Direct materials. . . .. 4 units of material A x $6.00 per unit, 1 unit of material B x $8.00 per unit

Direct labor. . . . . . . 3 hours x $18.00 per hour

Activity for September

Materials purchased:

Material A . . . . . . . . . 6,750 units x $6.20 per unit

Material B . . . . . . . . . 1,650 units x $8.50 per unit

Materials used:

Material A . . . . . . . . . 6,225 units

Material B . . . . . . . . . 1,508 units

Direct labor used. . . .4,425 hours x $18.80 per hour

Production output. . ... 1,500 units

There were no beginning direct materials inventories.  

a) Determine the materials price and quantity variances.

b) Determine the labor rate and efficiency variances.

Solutions

Expert Solution

Answer:

a) Determine the materials price and quantity variances.

the materials price variances

Material Price variance

(Actual price- standard price)x Actual Quantity

Material Price variance

Material-A

( 6.20 -6 ) x 6,225

1245 Unfavorable

Material- B

( 8.50 - 8) x 1,508

754 Unfavorable

1999 Unfavorable

Material Price variance =1999 unfavorable

the materials quantity variances

Material Quantity variance

(Actual quantity- standard quantity)x standard price

Material Quantity variance

Material-A

( 6225- 6000) x 6

1350 Unfavorable

(standard quantity =1500*4=6000

Material- B

( 1508-1500 ) x 8

64 Unfavorable

(standard quantity =1500*1=1500

1414 Unfavorable

Material Quantity variance =1414 Unfavorable

________________________________________________________

b)

Determine the labor rate and efficiency variances.

labor rate variances.

Labor   rate variance

(Actual rate- standard rate)x Actual Hours

Labor   rate variance

(18.80 -18 ) x 4425

3540 Unfavorable

Labor   rate variance =3540 unfavorable

labor efficiency variances.

Labor   efficiency variance

(Actual Hours - standard   Hours )slandered rate

Labor   rate variance

(4425 -4500 ) x 18

1350 Favorable

standard   Hours =1500x3=4500

Labor   efficiency variance =1350 Favorable


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