Question

1. The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials quantity variance? 2. The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials price variance? 3. A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

Answer 1

1)	Driect materials Quantity variance
	(actual qty - standard qty allowed)*Standard rate
	(47000 - 8000*6)*50
	50000	F
2)	Direct materials price variance
	(Actual price - standard price)*AQ purchased
	(51-50)*47000
	47000	U
3)	Direct labor Efficiency variance
	(Actual hrs - standard hrs allowed)*standard rate
	(22000 - 8000*3)*8
	16000	F