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

Material Price variance:
Actual Quantity			138000
Sstd price			4
Actual price			3.75
Material Price variance:			34500	favorable
(Actual Qty (Std price-Actual price))
material Qty variance"
Std price			4
Std qty			135000
Actual Qty			138000
material Qty variance"			12000	Unfavorable
(Std price(Std qty-Actual Qty))
Total Material cost Variance			22500	Favorable
Direct Labour Rate variance
Actual Hours			31000
Std rate			15
Actual rate			15.1
Direct Labour Rate variance			3100	Unfavorable
(Actual hours(Std rate-Actual rate))
Direct Labour Qty variance
Std rate			15
Std hours			27000
Actual hours			31000
Direct Labour Qty variance			60000	Unfavorable
(Std rate (Std hrs-Actual Hrs))
Total Labour cost variance			63100	Unfavorable