Use the following information for the Exercises below. [The following information applies to the questions displayed...

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

A manufactured product has the following information for June.

	Standard	Actual
Direct materials	5 lbs. @ $7 per lb.		43,000	lbs. @ $7.20 per lb.
Direct labor	2 hrs. @ $17 per hr.		16,700	hrs. @ $17.40 per hr.
Overhead	2 hrs. @ $13 per hr.	$	227,900
Units manufactured			8,500

Exercise 23-9 Direct materials variances LO P3

Compute the direct materials price variance and the direct materials quantity variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.)

Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per hour" answers to 2 decimal places.)

AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate

AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price

Solutions

Expert Solution

Actual Cost				Standard Cost
AQ	x	AP		AQ	x	SP		SQ	x	SP
43,000	x	7.2		43,000	x	7		42,500	x	7
	309600				301,000				297500
			8,600				3,500

Direct material Price Variance		8,600	Unfavourable
Direct material Quantity Variance	3,500	Unfavourable
Total material variance		12,100	Unfavourable

Actual Cost				Standard Cost
AH	x	AR		AH	x	SR		SH	x	SR
16700	x	17.4		16700	x	17		17000	x	17
	290580				283900				289000
			6680				5100

Direct labor rate Variance		6680	Unfavourable
Direct labor efficiency Variance	5100	Favourable
Total labor variance		1580	Unfavourable

ekkarill92 answered 1 year ago

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