In: Accounting
Crystal Charm Company makes handcrafted silver charms that
attach to jewelry such as a necklace or bracelet. Each charm is
adorned with two crystals of various colors. Standard costs
follow:
Standard Quantity | Standard (Rate) | Standard Unit Cost | |||||||
Silver | 0.25 | oz. | $ | 29.00 | per oz. | $ | 7.25 | ||
Crystals | 4.00 | $ | 0.40 | per crystal | 1.60 | ||||
Direct labor | 2.00 | hrs. | $ | 18.00 | per hr. | 36.00 | |||
During the month of January, Crystal Charm made 1,600 charms. The
company used 375 ounces of silver (total cost of $11,250) and 6,450
crystals (total cost of $2,451.00), and paid for 3,350 actual
direct labor hours (cost of $58,625.00).
Required:
1. Calculate Crystal Charm’s direct materials variances
for silver and crystals for the month of January. (Round
your intermediate calculations and final answers to 2 decimal
places. Indicate the effect of each variance by
selecting "F" for favorable, "U" for unfavorable.)
2. Calculate Crystal Charm’s direct labor
variances for the month of January. (Round your
intermediate calculations and final answers to 2 decimal
places.Indicate the effect of each variance by selecting "F" for
favorable, "U" for unfavorable.)
Silver |
Crystals |
|||
Direct Material Price Variance |
$ 375.00 |
Unfavourable-U |
$ 129.00 |
Favourable-F |
Direct material Quantity Variance |
$ 725.00 |
Favourable - F |
$ 20.00 |
Unfavourable-U |
--Working for Silver
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
( |
$ 29.00 |
- |
$ 30.00 |
) |
x |
375 |
-375 |
||||||
Variance |
$ 375.00 |
Unfavourable-U |
Material Quantity Variance |
||||||
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
( |
400 |
- |
375 |
) |
x |
$ 29.00 |
725 |
||||||
Variance |
$ 725.00 |
Favourable-F |
--Working for crystal
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Quantity |
( |
$ 0.40 |
- |
$ 0.38 |
) |
x |
6450 |
129 |
||||||
Variance |
$ 129.00 |
Favourable-F |
||||
Material Quantity Variance |
||||||
( |
Standard Quantity |
- |
Actual Quantity |
) |
x |
Standard Rate |
( |
6400 |
- |
6450 |
) |
x |
$ 0.40 |
-20 |
||||||
Variance |
$ 20.00 |
Unfavourable-U |
Labor Rate Variance |
||||||
( |
Standard Rate |
- |
Actual Rate |
) |
x |
Actual Labor Hours |
( |
$ 18.00 |
- |
$ 17.50 |
) |
x |
3350 |
1675 |
||||||
Variance |
$ 1,675.00 |
Favourable-F |
||||
Labour Efficiency Variance |
||||||
( |
Standard Hours |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
3200 |
- |
3350 |
) |
x |
$ 18.00 |
-2700 |
||||||
Variance |
$ 2,700.00 |
Unfavourable-U |
||||
Labor Spending Variance |
||||||
( |
Standard Cost |
- |
Actual Cost |
) |
||
( |
$ 57,600.00 |
- |
$ 58,625.00 |
) |
||
-1025 |
||||||
Variance |
$ 1,025.00 |
Unfavourable-U |