Question

Direct Materials and Direct Labor Variance Analysis

Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 30 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:

Standard wage per hour	$16.2
Standard labor time per unit	20 min.
Standard number of lbs. of brass	2.1 lbs.
Standard price per lb. of brass	$9.75
Actual price per lb. of brass	$10
Actual lbs. of brass used during the week	19,467 lbs.
Number of units produced during the week	9,000
Actual wage per hour	$16.69
Actual hours for the week (30 employees × 32 hours)	960 hrs.

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	$
Direct Materials Quantity Variance	$
Total Direct Materials Cost Variance	$

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	$
Direct Labor Time Variance	$
Total Direct Labor Cost Variance	$

Answer 1

*Standard quantity for actual output

= 9000 units × 2.1 lbs

. = 18,900 lbs

◆standard hours for actual output

= 9000 units × 20min / 60 min

= 3000 hrs