Question

Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using 27,900 yards...

Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using 27,900 yards of fabric costing $3.05 per yard and incurring direct labor costs of $21,910 for 3,130 hours of direct labor. The standard cost per pillowcase assumes 1.75 yards of fabric at $3.10 per yard, and 0.20 hours of direct labor at $5.95 per hour.

b.

Compute both the rate variance and efficiency variance for direct labor costs incurred in manufacturing pillowcases in May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round your answers to 2 decimal places.)

Labor rate varience: $____________

Labor efficiency variance: $______________

       

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Computation of labor rate variance and labor efficiency variance:

Labor rate variance = (standard rate - actual rate)*actual hours

Standard rate = $5.95

Actual rate = $21910/3130 =$7

Actual hours = 3130

Labor rate variance = ($5.95-7.00)*3130 = 3286.5 Unfavorable

Labor efficiency variance = (standard hours - actual hours)*Standard rate

Standard hours = 15000*0.20 = 3000 hours

Actual hours = 3130

Standard rate = $5.95

Labor efficiency variance= (3000-3130)*$5.95 =$773.5 Unfavorable

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During May, Joliet Fabrics Corporation manufactured 680 units of a special multilayer fabric with the trade...
During May, Joliet Fabrics Corporation manufactured 680 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May. Direct material purchased: 19,800 yards at $1.56 per yard $ 30,888 Direct material used: 11,300 yards at $1.56 per yard 17,628 Direct labor: 3,900 hours at $9.33 per hour 36,387 The standard prime costs for one unit of Stylex are as follows: Direct material: 20 yards at $1.53 per yard...
Maki, Inc. manufactures a product that has the following standard costs: Direct materials: 50 yards at...
Maki, Inc. manufactures a product that has the following standard costs: Direct materials: 50 yards at $2.60 per yard $ 130 Direct labor: 8 hours at $19.00 per hour 152 Total $ 282 The following information pertains to July: Direct material purchased: 55,100 yards at $2.65 per yard, or $146,015 Direct material used: 51,300 yards Direct labor: 7,100 hours at $19.5 per hour, or $138,450 Actual completed production: 1,090 units Use the information to compute the following variances: Required: Compute...
During March, Manhattan Fabrics Corporation manufactured 520 units of a special multilayer fabric with the trade...
During March, Manhattan Fabrics Corporation manufactured 520 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March.   Direct material purchased: 18,200 yards at $1.40 per yard $ 25,480   Direct material used: 9,700 yards at $1.40 per yard 13,580   Direct labor: 2,300 hours at $9.17 per hour 21,091 The standard prime costs for one unit of Stylex are as follows:   Direct material: 20 yards at $1.37 per yard...
The standard cost sheet for Chambers Company, which manufactures one product, follows: Direct materials, 40 yards...
The standard cost sheet for Chambers Company, which manufactures one product, follows: Direct materials, 40 yards at $3.00 per yard $ 120 Direct labor, 4 hours at $20 per hour 80 Factory overhead applied at 80% of direct labor 64 (variable costs = $50; fixed costs = $14) Variable selling and administrative 69 Fixed selling and administrative 45 Total unit costs $ 378 Standards have been computed based on a master budget activity level of 29,300 direct labor-hours per month....
During March, Manhattan Fabrics Corporation manufactured 650 units of a special multilayer fabric with the trade...
During March, Manhattan Fabrics Corporation manufactured 650 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March. During March, Manhattan Fabrics Corporation manufactured 650 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March.   Direct material purchased: 19,500 yards at $1.53 per yard $ 29,835   Direct material used: 11,000 yards at $1.53 per yard...
Basil Tooling uses a standard cost system to account for the costs of its one product....
Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4.0 sheets of ½ inch steel at $110 per sheet and 14.1 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 620 units. Materials purchased and used totaled 2,560 sheets at a total cost of $270,100. Payroll totaled $113,390 for 8,820 hours worked. a. Calculate the direct materials price variance. (Do not round your intermediate calculations....
Basil Tooling uses a standard cost system to account for the costs of its one product....
Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4.0 sheets of ½ inch steel at $110 per sheet and 14.1 hours of labor at a standard wage rate of $14. During July, Basil Tooling produced 600 units. Materials purchased and used totaled 2,550 sheets at a total cost of $268,900. Payroll totaled $122,120 for 8,800 hours worked. a. Calculate the direct materials price variance. (Do not round your intermediate calculations....
Basil Tooling uses a standard cost system to account for the costs of its one product....
Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 3.9 sheets of ½ inch steel at $110 per sheet and 14.1 hours of labor at a standard wage rate of $14. During July, Basil Tooling produced 620 units. Materials purchased and used totaled 2,590 sheets at a total cost of $273,650. Payroll totaled $121,940 for 8,800 hours worked. a. Calculate the direct materials price variance. (Do not round your intermediate calculations....
Flandro Company uses a standard cost system and sets its predetermined overhead rate on the basis...
Flandro Company uses a standard cost system and sets its predetermined overhead rate on the basis of direct labor-hours. The following data are taken from the company’s planning budget for the current year: Denominator activity (direct labor-hours) 10,000 Variable manufacturing overhead cost $ 37,500 Fixed manufacturing overhead cost $ 64,500 The standard cost card for the company’s only product is given below: Inputs (1) Standard Quantity or Hours (2) Standard Price or Rate Standard Cost (1) × (2) Direct materials...
Top Hand company makes a tote bag and uses a standard cost system. Each tote bag...
Top Hand company makes a tote bag and uses a standard cost system. Each tote bag should use 2 yards of material that costs $5.00 per yard. Stitching on each bag should take a half hour of labor time of line workers who are paid an average wage of $20 per hour. Last month 15,000 tote bags were produced. Looking at the production records, you find that $144,000 was spent to purchase the 32,000 yards of material used in production....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT