Question

Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 30 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:

Standard wage per hour	$17.40
Standard labor time per unit	20 min.
Standard number of lbs. of brass	1.2 lbs.
Standard price per lb. of brass	$9.50
Actual price per lb. of brass	$9.75
Actual lbs. of brass used during the week	8,528 lbs.
Number of units produced during the week	6,900
Actual wage per hour	$17.92
Actual hours for the week (30 employees × 40 hours)	1,200

Required:

a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

Direct materials standard cost per unit	$
Direct labor standard cost per unit	$
Total standard cost per unit	$

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance	$	Unfavorable
Direct Materials Quantity Variance	$	Unfavorable
Total Direct Materials Cost Variance	$	Unfavorable

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Labor Rate Variance	$	Unfavorable
Direct Labor Time Variance	$	Favorable
Total Direct Labor Cost Variance	$	Favorable

Answer 1

Std Cost per unit
Material (1.20 lbs @ 9.50)	11.4
Labour(20 mins @ 17.40 per hour)	5.8
Std Cost per unit		17.2
Std qty allowed (6900*1.20)	8280
Std price			9.5
Actual qty used		8528
Actual price		9.75
material price variance = Actual qty (Std price-Actual price)
		8528 (9.50-9.75) =	2132	Unfav
Material Qty variance = Std price (Std qty-Actual qty)
		9.50 (8280-8528) =	2356	Unfav
Material Cost variance = Std qty*Std price - Actual qty*Actual price
		8280*9.50 - 8528*9.75 =	4488	Unfav
Std hours allowed (6900*20/60)	2300
Std rate			17.4
Actual hours		1200
Actual rate		17.92
Labour rate variance = Actual hours (Std rate - Actual rate)
		1200 (17.40-17.92) =	624	Unfav
Labour efficiency variance = Std rate (Std hours- Actual hours)
		17.40 (2300-1200) =	19140	Fav
labour cost variance = Std hours*Std rate - Actual hours*Actual rate
		2300*17.40 - 1200*17.92 =	18516	Fav