At the beginning of June, Cornerstone Printing Company budgeted 16,000 books to

Question

At the beginning of June, Cornerstone Printing Company budgeted 16,000 books to be printed in June at standard direct materials and direct labor costs as follows: direct materials - $33,600; direct labor - $13,440; total - $47,040

The standard materials price is $.70 per pound. The standard labor rate is $14.00 per hour. At the end of June, he actual direct materials and direct labor costs are as follows: actual direct materials - $32,200; actual direct labor - $12,900; total - $45,100

There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Cornerstone Printing Company actually produced 14,900 units during June.

Determine direct materials quantity and direct labor time variances.

Explanation / Answer

Since there is no price variance SR=AR

direct materials quantity = (SQ-AQ)*SR = (44700*.70 - 32200 ) = $910 (U)

direct labor time variances= (SH-AH)*SR = (894*14 - 12900) = $ 384 (U)

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