New Jersey Valve Company manufactured 6,800 units during January of a control va

Question

New Jersey Valve Company manufactured 6,800 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following:

Prepare a schedule of standard production costs for January, based on actual production of 6,800 units. (Omit the "$" sign in your response.)

For the month of January, compute the following variances, indicating whether each is favorable or unfavorable. (Select "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)

  Direct labor 41,600 hr. at $14.70 per
  Direct material purchased 26,000 lb. at $2.10 per
  Direct material used 25,600 lb.

Explanation / Answer

1 Prepare a schedule of standard production costs for January, based on actual production of 6,800 units. (Omit the "$" sign in your response.) NEW JERSEY VALVE COMPANY CAMDEN PLANT SCHEDULE OF STANDARD PRODUCTION COSTS BASED ON 6,800 UNITS FOR THE MONTH OF JANUARY   Direct material $           54,400.00   Direct labor $         616,080.00   Total standard production costs $         670,480.00 2 For the month of January, compute the following variances, indicating whether each is favorable or unfavorable. (Select "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" sign in your response.)   Direct-material price variance on purchase qty =(Standard Price - Actual Price)*Actual Qty = (2.00-2.10)*26000 = $2600 (U) Direct-material price variance on Produced qty =(Standard Price - Actual Price)*Actual Qty = (2.00-2.10)*25600 = $2560 (U)   Direct-material quantity variance = (Standard QTY - Actual QTY)*Standard Price = (27200-25600)*2 = $3200 (F)   Direct-labor rate variance =(Standard Rate - Actual Rate)*Actual Hr = (15.10-14.70)*41600 = $16640 (F)   Direct-labor efficiency variance = (Standard Hr - Actual Hr)*Standard Rate = (40800-41600)*15.10 = $12080 (U)

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