Question

23-11 Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.
					# Lbs/Hrs per unit	Cost per lb/Hr	Standard Cost
Materials	15	$4.00	$60
Direct Labor	3	$15.00	$45
During May the company incurred the following actual costs to produce 9,000 units.
					Total Lbs/Hrs	Cost per lb/Hr	Standard Cost
Materials	138,000	$3.75	$517,500
Direct Labor	31,000	$15.10	$468,100
Compute the (1) direct materials price and quantity variances and (2) direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. Green Highlights require your input
				Green highlights you must input
				(1) direct materials price and quantity variances.
				Direct Material Price Variance
Actual Quanity
Standard Price
Actual Price
Price Variance (Fav)
Direct Material Qty Variance
Standard Price
Standard Quanity
Actual Qty
Direct Material Qty Variance (fav)
Total Material Variance
(2) direct labor rate and efficiency variances
Direct Labor Rate Variance
Actual Quanity
Standard Rate
Actual Rate
Rate Variance (Fav)
Direct Labor Qty Variance
Standard Rate
Standard Quanity
Actual Qty
Direct Labor Qty Variance (fav)
Total LaborVariance

Answer 1

Req 1.
			Std Lbs/hr	Cost	Total Std cost
material			6	8	48
labour			2	16	32
Overheads			2	12	24
		Std cost per unit			104
Req 2.
Actual
material
Units		48500
Price		8.1
material c ost			392850
labour
Hours		15700
Rate per hour		16.5
labour cost			259050
Overheads			198000
Total cost			849900
Std
Material
Lbs/unit		6
units manufactured		8000
Rate per lbs		8
Material cost			384000
labour
hrs/Unit		2
units manufactured		8000
Rate per hour		16
labour cost			256000
Overheads
hrs/Unit		2
units manufactured		8000
Rate per hour		12
Overheads cost			192000
Total cost			832000
Variance- Unfavorable			17900