Question

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	$

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)