Question

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

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 30 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows:

Standard wage per hour $11.4
Standard labor time per unit 20 min.
Standard number of lbs. of brass 1.9 lbs.
Standard price per lb. of brass $13
Actual price per lb. of brass $13.25
Actual lbs. of brass used during the week 15,852 lbs.
Number of units produced during the week 8,100
Actual wage per hour $11.74
Actual hours for the week (30 employees × 35 hours) 1,050 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 $

Homework Answers

Answer #1
a
Direct materials standard cost per unit 24.70 =1.9*13
Direct labor standard cost per unit 3.80 =11.4*(20/60)
Total standard cost per unit 28.50
b
Direct Materials Price Variance 3963 Unfavorable =15852*(13.25-13)
Direct Materials Quantity Variance 6006 Unfavorable =13*(15852-8100*1.9)
Total Direct Materials Cost Variance 9969 Unfavorable =(15852*13.25)-(8100*24.7)
c
Direct Labor Rate Variance 357 Unfavorable =1050*(11.74-11.4)
Direct Labor Time Variance -18810 Favorable =11.4*(1050-8100*20/60)
Total Direct Labor Cost Variance -18453 Favorable =(1050*11.74)-(8100*3.8)
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