Question

Ravena Labs., Inc. makes a single product which has the following standards: Direct materials.................................... 2.5 ounces...

Ravena Labs., Inc. makes a single product which has the following standards:

Direct materials....................................

2.5 ounces at $21 per ounce

Direct labor..........................................

1.5 hours at $12.50 per hour

3,750 units of compound were produced during the month.

There was no beginning direct materials inventory.

The ending direct materials inventory was 2,000 ounces.

Direct materials purchased: 12,000 ounces for $225,000.

Direct labor hours worked: 5,600 hours at a cost of $67,200.

A.The direct materials price variance for October is:

B.The direct materials quantity variance for October is:

C. The direct labor rate variance for October is:

D. The direct labor efficiency variance for October is:

           

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Answer #1

A.The direct materials price variance for October is:

Direct Material used =12000-2000=10000

Actual cost per unit =225000/12000=18.75

direct materials price variance =10000*(21-18.75)=22500 Favorable

B.The direct materials quantity variance for October is:

(10000-3750*2.5)*21

=13125 Unfavorable

C. The direct labor rate variance for October is:

67200-5600*12.50=2800 Favorable

D. The direct labor efficiency variance for October is:

(5600-3750*1.5)*12.50=312.50=312.50 Favorable

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