Question

Malden Outdoor Products Inc. produces several products, including handmade large fiberglass planters for outdoor displays. The firm, which began operations at the beginning of this year, uses a standard cost system. The standard costs for one large planter are: Direct material (3 lbs. @ $8.00) $ 24.00 Direct labor (2 hrs. @ $15.00) 30.00 Variable overhead 24.00 Fixed overhead 6.00 Standard cost per unit $84.00 The $6.00 fixed overhead rate is based on total budgeted fixed overhead costs of $18,000 and estimated sales of 3,000 units. There were no changes in any inventory account during the period. The company produced and sold 3,100 units at the following costs: Direct materials (9,000 lbs.) $ 81,270 Direct labor (6,000 hrs.) 78,000 Variable overhead 76,000 Fixed overhead 16,500 Total production costs incurred $251,770 Calculate the following

1-What is the direct materials price variance

2-What is the direct material quantity vaiance

3- what is the direct labor rate variance

4- what is the direct labor efficiency variance

Answer 1

Particulars	Qty/ hours	Rate	amount	Qty/ hours	Rate	amount
Materials	9,300.00	8.00	74,400.00	9,000.00	9.03	81,270.00
Labour	6,200.00	15.0000	93,000.00	6,000.00	13.00	78,000.00
Actual output	3,100.00
Materials reqd (125000*1.7)	9,300.00
Labour hrs reqd (125000*1.7)	6,200.00
DMPV = (SP-AP)*AQ purchased
DMPV = (8 - 9.03)9000
DMPV = 9270 U
DMQV= (SQ-AQ)SP
DMQV= (9300 - 9000)8
DMQV= 2,400 F
DLRV= (SR-AR)AH
DLRV= (15 - 13)6000
DLRV= 12000 F
DLEV = (SH-AH)SR
DLEV = (6200 - 6000)15
DLEV = 3000 F