Question

Problem 23-2A (Part Level Submission)

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017.

Costs and Production Data

                                                                     Actual

                                                                                                       Standard

Raw materials unit cost                          $2.10                               $1.90

Raw materials units used                              11,100                   10,700

Direct labor payroll                                   $163,900                   $160,650

Direct labor hours worked                           14,900                   15,300

Manufacturing overhead incurred            $208,340              0             

Manufacturing overhead applied                   0                       $211,140

Machine hours expected to be used at normal capacity   41,500

Budgeted fixed overhead for June            0                              $66,400

Variable overhead rate per machine hour              0              $3.00

Fixed overhead rate per machine hour                   0              $1.60

Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $492,000. Selling and administrative expenses were $35,300. Assume that the amount of raw materials purchased equaled the amount used.

(a)

Compute all of the variances for (1) direct materials and (2) direct labor. (Round answers to 0 decimal places, e.g. 125.) Include favorable/ unfavorable/ neither

(1)                          Total materials variance                $

Materials price variance                $

Materials quantity variance                         $

(2)                          Total labor variance                        $

Labor price variance                        $

Labor quantity variance                 $

Answer 1

1
Total materials variance	2980	Unfavorable	=(11100*2.1)-(10700*1.9)
Materials price variance	2220	Unfavorable	=11100*(2.1-1.9)
Materials quantity variance	760	Unfavorable	=1.9*(11100-10700)
2
Standard labor rate	10.5		=160650/15300
Total labor variance	3250	Unfavorable	=163900-160650
Labor price variance	7450	Unfavorable	=163900-(14900*10.5)
Labor quantity variance	4200	Favorable	=10.5*(14900-15300)