The following data is given for the Taylor Company: Budgeted production 1,000 un

Question

The following data is given for the Taylor Company:

Budgeted production 1,000 units
Actual production 980 units
Materials:
Standard price per lb $2.00
Standard pounds per completed unit 12
Actual pounds purchased and used in production 11,800
Actual price paid for materials $23,000
Labor:
Standard hourly labor rate $14 per hour
Standard hours allowed per completed unit 4.5
Actual labor hours worked 4,560
Actual total labor costs $62,928
Overhead:
Actual and budgeted fixed overhead $27,000
Standard variable overhead rate $3.50 per standard labor hour
Overhead is applied on standard labor hours.

The direct material prive variance is? The direct material quantity variance is?

Explanation / Answer

Materials quantity variance = (Actual quantity used × Standard price) - (Standard quantity allowed × Standard Price) Actual Quantity Used = 11800 Standard Price = $2.00 Standard Quantity = standard pounds per unit X actual production = 11760 (11800*$2.00)-(11760*2) = 23600 - 23520 = 80 materials quantity variance Materials Price Variance = (Actual quantity purchased × Actual price) - (Actual quantity purchased × Standard price) Actual Quantity Purchases = 11800 Actual Price = $23,000/11800 = $1.95 Standard Price = $2.00 (11800*1.95) – (11800*2.00) = 590 23010 - 23600

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