Question

Direct Labor

Under normal conditions, Sarah spends $8.40 per unit of materials, and it will take 3.6 units of material per pair of shoes. During July, Sole Purpose Shoe Company incurred actual direct materials costs of $60,632 for 6,890 units of direct materials in the production of 2,150 pairs of shoes.

Complete the following table, showing the direct materials variance relationships for July for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable cost variance, and a positive number for an unfavorable cost variance.

Actual Cost								Standard Cost
Actual Quantity	X	Actual Price		Actual Quantity	X	Standard Price		Standard Quantity	X	Standard Price
	X				X
	=				=				=
			Direct Materials Variance:				Direct Materials Variance:
					Total Direct Materials Variance:
Direct Labor

Under normal conditions, Sarah pays her employees $8.50 per hour, and it will take 2.8 hours of labor per pair of shoes. During August, Sole Purpose Shoe Company incurred actual direct labor costs of $66,612 for 7,320 hours of direct labor in the production of 2,100 pairs of shoes.

Complete the following table, showing the direct labor variance relationships for August for Sole Purpose Shoe Company. If required, round your answers to two decimal places. When entering variances, use a negative number for a favorable variance, and a positive number for an unfavorable variance.

Actual Cost								Standard Cost
Actual Hours	X	Actual Rate		Actual Hours	X	Standard Rate		Standard Hours	X	Standard Rate
	X				X
	=				=				=
			Direct Labor Variance:				Direct Labor Variance:
					Total Direct Labor Variance:

Answer 1

Actual Cost								Standard Cost
Actual Quantity	X	Actual Price		Actual Quantity	X	Standard Price		Standard Quantity	X	Standard Price
6,890	X	8.8 (60,632/6,890)		6,890	X	8.4		7,740 (2150*3.6)		8.4
	= 60,632				= 57,876				= 65,016
			Direct Materials Variance : 2,756 Unfavourable				Direct Materials Variance : 7,140 Favourable
					Total Direct Materials Variance : 4,384 Favourable

Actual Cost								Standard Cost
Actual Hours	X	Actual Rate		Actual Hours	X	Standard Rate		Standard Hours	X	Standard Rate
7,320	X	9.1 (66,612/7,320)		7,320	X	8.5		5,880 (2.8*2,100)		8.5
	= 66,612				= 62,220				= 49,980
			Direct Labor Variance : 4,392 Unfavourable				Direct Labor Variance : 12,240 Unfavourable
					Total direct labour variance : 16,632 Unfavourable