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

Standard wage per hour	$16.80
Standard labor time per unit	20 min.
Standard number of lbs. of brass	1.9 lbs.
Standard price per lb. of brass	$10.25
Actual price per lb. of brass	$10.50
Actual lbs. of brass used during the week	11,742 lbs.
Number of units produced during the week	6,000
Actual wage per hour	$17.30
Actual hours for the week (30 employees × 35 hours)	1,050

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	$fill in the blank 1
Direct labor standard cost per unit	$fill in the blank 2
Total standard cost per unit	$fill in the blank 3

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	$fill in the blank 4
Direct Materials Quantity Variance	$fill in the blank 6
Total Direct Materials Cost Variance	$fill in the blank 8

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	$fill in the blank 10
Direct Labor Time Variance	$fill in the blank 12
Total Direct Labor Cost Variance	$fill in the blank 14

Answer 1

a
Direct materials standard cost per unit	19.48	=1.9*10.25
Direct labor standard cost per unit	5.60	=16.8*20/60
Total standard cost per unit	25.08
b
Direct Materials Price Variance	2936	Unfavorable	=11742*(10.5-10.25)
Direct Materials Quantity Variance	3506	Unfavorable	=10.25*(11742-6000*1.9)
Total Direct Materials Cost Variance	6441 or 6442	Unfavorable	=(11742*10.5)-(6000*1.9*10.25)
c
Direct Labor Rate Variance	525	Unfavorable	=1050*(17.3-16.8)
Direct Labor Time Variance	-15960	Favorable	=16.8*(1050-6000*20/60)
Total Direct Labor Cost Variance	-15435	Favorable	=(1050*17.3)-(6000*16.8*20/60)