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Cato Band Uniforms uses a standard costing system. The standard material and labor costs for producing...

Cato Band Uniforms uses a standard costing system. The standard material and labor costs for producing a marching band hat are as follows:

Materials (0.90 yards × $12.00) $10.80
Direct labor (1.20 hours × $14.10) $16.92
During May, the company produced 3,800 band hats; 3,840 yards of material were purchased for $41,472, and 3,050 yards of material were used in production. Also during May, 4,460 direct labor hours were worked at a cost of $53,520. Calculate material price and quantity variances and labor rate and efficiency variances. Indicate whether the variances are favorable or unfavorable. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125. Enter all variances as a positive number.)

Material Price Variance $
FavorableNeither Unfavorable nor FavorableUnfavorable
Material Quantity Variance $
UnfavorableNeither Unfavorable nor FavorableFavorable
Labor Rate Variance $
FavorableUnfavorableNeither Unfavorable nor Favorable
Labor Efficiency Variance $
FavorableUnfavorableNeither Unfavorable nor Favorable

Solutions

Expert Solution

  • [1]

Material Price Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Quantity

(

$                              12.00

-

$                    10.80

)

x

3840

4608

Variance

$              4,608.00

Favourable-F

OR

Material Price Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Quantity used

(

$                              12.00

-

$                    10.80

)

x

3050

3660

Variance

$              3,660.00

Favourable-F

  • [2]

Material Quantity Variance

(

Standard Quantity

-

Actual Quantity

)

x

Standard Rate

(

3420

-

3050

)

x

$                        12.00

4440

Variance

$              4,440.00

Favourable-F

  • [3]

Labor Rate Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Labor Hours

(

$                              14.10

-

$                    12.00

)

x

4460

9366

Variance

$              9,366.00

Favourable-F

  • [4]

Labour Efficiency Variance

(

Standard Hours

-

Actual Hours

)

x

Standard Rate

(

4560

-

4460

)

x

$                        14.10

1410

Variance

$              1,410.00

Favourable-F

  • Workings

Actual DATA for

3800

units

Quantity (AQ)

Rate (AR)

Actual Cost

Direct Material

3050

$                10.80

$           32,940.00

Direct labor

4460

$                12.00

$           53,520.00

Standard DATA for

3800

units

Quantity (SQ)

Rate (SR)

Standard Cost

[A]

[B]

[A x B]

Direct Material

( 0.9 yards x 3800 units)=3420 yards

$                12.00

$       41,040.00

Direct labor

( 1.2 hours x 3800 units)=4560 hours

$                14.10

$       64,296.00

ekkarill92 answered 2 years ago
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