Question

Direct Materials and Direct Labor Variance Analysis

Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:

Standard wage per hour	$13.20
Standard labor time per unit	15 min.
Standard number of lbs. of brass	2.1 lbs.
Standard price per lb. of brass	$9.25
Actual price per lb. of brass	$9.50
Actual lbs. of brass used during the week	13,627 lbs.
Number of units produced during the week	6,300
Actual wage per hour	$13.60
Actual hours for the week (40 employees × 32 hours)	1,280

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	19.43	=2.1*9.25
Direct labor standard cost per unit	3.30	=13.2*(15/60)
Total standard cost per unit	22.73
b
Direct Materials Price Variance	3317	Unfavorable	=13267*(9.5-9.25)
Direct Materials Quantity Variance	342	Unfavorable	=9.25*(13267-6300*2.1)
Total Direct Materials Cost Variance	3659	Unfavorable	=(13267*9.5)-(6300*2.1*9.25)
c
Direct Labor Rate Variance	512	Unfavorable	=1280*(13.6-13.2)
Direct Labor Time Variance	-3894	Favorable	=13.2*(1280-6300*15/60)
Total Direct Labor Cost Variance	-3382	Favorable	=(1280*13.6)-(6300*13.2*15/60)