In: Accounting
5.
E9-13 Determining Actual Costs, Standard Costs, and Variances [LO 9-3, 9-4]
Amber Company produces iron table and chair sets. During
October, Amber’s costs were as follows:
Actual purchase price | $ 2.80 | per lb. |
Actual direct labor rate | $ 8.00 | per hour |
Standard purchase price | $ 2.60 | per lb. |
Standard quantity for sets produced | 1,020,000 | lbs. |
Standard direct labor hours allowed | 21,000 | |
Actual quantity purchased in October | 1,265,000 | lbs. |
Actual direct labor hours | 15,000 | |
Actual quantity used in October | 1,050,000 | lbs. |
Direct labor rate variance | $6,000 | F |
Required:
1. Calculate the total cost of purchases for
October.
2. Compute the direct materials price variance
based on quantity purchased. (Indicate the effect of each
variance by selecting "F" for favorable, "U" for
unfavorable.)
3. Calculate the direct materials quantity
variance based on quantity used. (Indicate the effect of
each variance by selecting "F" for favorable, "U" for
unfavorable.)
4. Compute the standard direct labor rate for
October. (Round your answer to 2 decimal
places.)
5. Compute the direct labor efficiency variance
for October. (Round your intermediate calculation to 2
decimal places. Indicate the effect of each variance by selecting
"F" for favorable, "U" for unfavorable.)