Question

The following labor standards have been established for a particular product:

Standard labor-hours per unit of output 2.4 hours
Standard labor rate $13.95 per hour

The following data pertain to operations concerning the product for the last month:

  

Actual hours worked 4,300 hours
Actual total labor cost $50,720
Actual output 2,900 units

What is the labor rate variance for the month?

$9,265 F

$10,847 F

$3,360 F

$3,360 U

Jackson Industries uses a standard cost system in which direct materials inventory is carried at standard cost. Jackson has established the following standards for one unit of product.

Standard Quantity Standard Price or Rate Standard Cost
Direct materials 8 pounds $3.00 per pound $24.00
Direct labor 2.00 hours $11.00 per hour $22.00

During May, Jackson purchased 134,000 pounds of direct material at a total cost of $471,000. The total factory wages for May were $360,000, 90 percent of which were for direct labor. Jackson manufactured 22,000 units of product during May using 105,000 pounds of direct material and 22,000 direct labor-hours.

The price variance for the direct material acquired by Jackson Industries during May is:

$65,600 Favorable

$69,000 Unfavorable

$72,000 Favorable

$65,600 Unfavorable

Oddo Corporation makes a product with the following standard costs:

Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit
  Direct materials 2.0 ounces $13.00 per ounce $26.00
  Direct labor 0.8 hours $19.00 per hour $15.20
  Variable overhead 0.8 hours $11.50 per hour $9.20

The company reported the following results concerning this product in December.

  Originally budgeted output 12,000 units
  Actual output 11,800 units
  Raw materials used in production 18,000 ounces
  Actual direct labor-hours 9,640 hours
  Purchases of raw materials 19,600 ounces
  Actual price of raw materials 12.75 per ounce
  Actual direct labor rate 19.20 per hour
  Actual variable overhead rate 10.70 per hour

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The materials price variance for December is:

$77,300 U
$77,300 F
$4,900 F
$4,900 U

Answer 1

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