Question

During June, Danby Company’s material purchases amounted to 6,900 pounds at a price of $7.70 per pound. Actual costs incurred in the production of 1,500 units were as follows:

Direct labor:	$	120,520	($18.40 per hour)
Direct material:	$	35,420	($7.70 per pound)

The standards for one unit of Danby Company’s product are as follows:

Direct Labor:	Direct Material:
Quantity, 4 hours per unit	Quantity, 3 pounds per unit
Rate, $18.30 per hour	Price, $7.40 per pound

Required:

Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

Answer 1

answered by: anonymous