Direct Materials and Direct Labor Variance Analysis
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:
Standard wage per hour | $12.60 |
Standard labor time per unit | 20 min. |
Standard number of lbs. of brass | 1.6 lbs. |
Standard price per lb. of brass | $11.50 |
Actual price per lb. of brass | $11.75 |
Actual lbs. of brass used during the week | 14,338 lbs. |
Number of units produced during the week | 8,700 |
Actual wage per hour | $12.98 |
Actual hours for the week (50 employees × 32 hours) | 1,600 |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
Direct materials standard cost per unit | $ |
Direct labor standard cost per unit | $ |
Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct Materials Price Variance | $ | |
Direct Materials Quantity Variance | $ | |
Total Direct Materials Cost Variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct Labor Rate Variance | $ | |
Direct Labor Time Variance | $ | |
Total Direct Labor Cost Variance | $ |
ACCT 101B - CH 23 example 1
a | |||
Direct materials standard cost per unit | 18.40 | =1.6*11.50 | |
Direct labor standard cost per unit | 4.20 | =12.6*(20/60) | |
Total standard cost per unit | 22.60 | ||
b | |||
Direct Materials Price Variance | 3585 | Unfavorable | =14338*(11.75-11.5) |
Direct Materials Quantity Variance | 4807 | Unfavorable | =11.5*(14338-8700*1.6) |
Total Direct Materials Cost Variance | 8392 | Unfavorable | =(14338*11.75)-(8700*1.6*11.5) |
c | |||
Direct Labor Rate Variance | 608 | Unfavorable | =1600*(12.98-12.6) |
Direct Labor Time Variance | -16380 | Favorable | =12.6*(1600-8700*20/60) |
Total Direct Labor Cost Variance | -15772 | Favorable | =(1600*12.98)-(8700*12.6*20/60) |
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