Question

# #11 Direct Materials and Direct Labor Variance Analysis Abbeville Fixture Company manufactures units in a small...

#11

Direct Materials and Direct Labor Variance Analysis

Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 40 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:

 Standard wage per hour \$12.6 Standard labor time per unit 20 min. Standard number of lbs. of brass 1.7 lbs. Standard price per lb. of brass \$11 Actual price per lb. of brass \$11.25 Actual lbs. of brass used during the week 15,234 lbs. Number of units produced during the week 8,700 Actual wage per hour \$12.98 Actual hours for the week (40 employees × 40 hours) 1,600 hrs.

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 \$

 a Direct materials standard cost per unit 18.70 =11*1.7 Direct labor standard cost per unit 4.20 =12.6*(20/60) Total standard cost per unit 22.90 b Direct Materials Price Variance 3809 Unfavorable =15234*(11.25-11) Direct Materials Quantity Variance 4884 Unfavorable =11*(15234-8700*1.7) Total Direct Materials Cost Variance 8693 Unfavorable =(15234*11.25)-(8700*18.7) 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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