The following actual and standard cost data for direct material and direct labor relate to the...

The following actual and standard cost data for direct material and direct labor relate to the production of 2,000 units of a product: Actual Costs Standard Costs Direct material 21,450 lbs. @ $5.30 22,000 lbs. @ $5.10 Direct labor 34,100 hrs. @ $8.40 33,000 hrs. @ $8.70 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable. Materials Variances Actual cost: $Answer Split cost: $Answer Standard cost: $Answer a. Materials price $Answer AnswerFU b. Materials efficiency $Answer AnswerFU Labor Variances Actual cost: $Answer Split cost: $Answer Standard cost: $Answer c. Labor rate $Answer AnswerFU d. Labor efficieny $Answer AnswerFU

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Expert Solution

Answer a

Material price variance = [Actual quantity of raw material * Actual price] - [Actual quantity of raw material * Standard price]

Material price variance = [21450 lbs * $5.30] - [21450 lbs * $5.10] = $113685 - $109395 = $4290 U

Answer b

Material Efficiency Variance = [Actual quantity of raw material * Standard price] - [Standard quantity of raw material * Standard price]

Material Efficiency Variance = [21450 lbs * $5.10] - [22000 lbs * $5.10] = $109395 - $112200 = $2805 F

Answer c

Labour rate variance = [Actual labour hours * Actual labour rate] - [Actual labour hours * standard labour rate]

Labour rate variance = [34100 labour hours * $8.40] - [34100 labour hours * $8.70] = $286440 - $296670 = $10230 F

Answer d

Labour efficiency variance = [Actual labour hours * Standard labour rate] - [Standard labour hours * standard labour rate]

Labour efficiency variance = [34100 labour hours * $8.70] - [33000 labour hours * $8.70] = $296670 - $287100 = $9570 U

ekkarill92 answered 1 year ago

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