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In: Accounting

Genent​ Industries, Inc.​ (GII), developed standard costs for direct material and direct labor. In​ 2017, GII...

Genent​ Industries, Inc.​ (GII), developed standard costs for direct material and direct labor. In​ 2017, GII estimated the following standard costs for one of their major​ products, the 30minus−gallon heavyminus−duty plastic container. Budgeted quantity Budgeted price Direct materials 0.10.1 pounds $ 30$30 per pound Direct labor 0.30.3 hours $ 16$16 per hour During​ July, GII produced and sold 4 comma 0004,000 containers using 700700 pounds of direct materials at an average cost per pound of $ 29$29 and 1 comma 2801,280 direct manufacturing labor hours at an average wage of $ 16.25$16.25 per hour. The direct manufacturing labor flexibleminus−budget variance during July is​ ________.

Solutions

Expert Solution

direct manufacturing labor flexible−budget variance during July is​ $1,600 Unfavorable

Working

Labor Spending Variance
( Standard Cost - Actual Cost )
( $         19,200.00 - $             20,800.00 )
-1600
Variance $                1,600.00 Unfavourable-U

.

Actual DATA for 4000 Units
Quantity (AQ) Rate (AR) Actual Cost
Direct labor 1280 $         16.25 $          20,800.00

.

Standard DATA for 4000 Units
Quantity (SQ) Rate (SR) Standard Cost
[A] [B] [A x B]
Direct labor ( 0.3 Hour x 4000 Units)=1200 Hour $                16.00 $            19,200.00

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