Question

1. Direct Materials and Direct Labor Variance Analysis

   Abbeville Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 90 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

   Standard wage per hr.	$15.00
   Standard labor time per faucet	40 min.
   Standard number of lbs. of brass	3 lbs.
   Standard price per lb. of brass	$2.40
   Actual price per lb. of brass	$2.50
   Actual lbs. of brass used during the week	14,350 lbs.
   Number of faucets produced during the week	4,800
   Actual wage per hr.	$14.40
   Actual hrs. for the week (90 employees × 36 hours)	3,240 hrs.

   Required:

   a. Determine the A detailed estimate of what a product should cost.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 is the difference between the actual and standard prices, multiplied by the actual quantity.price variance, direct materials The cost associated with the difference between the standard quantity and the actual quantity of direct materials used in producing a commodity.quantity variance, and total direct materials The difference between actual cost and standard cost at actual volumes.cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

   Direct Materials Price Variance	$	Unfavorable Favorable Unfavorable
   Direct Materials Quantity Variance	$	Favorable Favorable Unfavorable
   Total Direct Materials Cost Variance	$	Unfavorable Favorable Unfavorable

   c. Determine the direct labor The cost associated with the difference between the standard rate and the actual rate paid for direct labor used in producing a commodity.rate variance, direct labor The cost associated with the difference between standard and actual hours of direct labor spent for producing a commodity.time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

   Direct Labor Rate Variance	$	Favorable Favorable Unfavorable
   Direct Labor Time Variance	$	Unfavorable Favorable Unfavorable
   Total Direct Labor Cost Variance	$	Favorable Favorable Unfavorable

Answer 1

ans 1
Direct materials standard cost per unit	3*2.4	$7.20
Direct labor standard cost per unit	$15*40/60	$10
Total standard cost per unit		$17.20
ans 2
	in $
Direct Materials Price Variance	1435	Unfavorable
(AQ*AP)-(AQ*SP)
14350*(2.5-2.4)
Direct Materials Quantity Variance	120	Favorable
SP*(AQ-SQ allowed)
2.4*(14350-(4800*3))
Total Direct Materials Cost Variance	1315	Unfavorable
ans 3
Direct Labor Rate Variance	1944	Favorable
AH*(AR-SR)
3240*(14.4-15)
Direct Labor Time Variance	600	Unfavorable
15*(3240-(4800*40/60))
Total Direct Labor Cost Variance	1344	Favorable
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