Direct Materials and Direct Labor Variances At the beginning of June, Cornerston
ID: 2376617 • Letter: D
Question
Direct Materials and Direct Labor Variances
At the beginning of June, Cornerstone Printing Company budgeted 15,000 books to be printed in June at standard direct materials and direct labor costs as follows:
$33,600
The standard materials price is $0.40 per pound. The standard direct labor rate is $13.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:
$32,300
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 14,000 units during June.
Determine the direct materials quantity and direct labor time variances. Use the minus sign to enter favorable variances as negative numbers.
Direct materials $18,000 Direct labor 15,600 Total$33,600
Explanation / Answer
first of all we require dat how much books is produced per dollar
given
Direct material = $18000
books = 15000
total amount of books produced per dollar ll be = $18000/15000 = $1.2 per book
hence the actual production ll be = $ 14000 * 1.2 = $ 16800
hence the direct material quantity variance ll be = Actual direct material - 16800
= $17300- 16800
= $500
which is the answer of the first part
2. eaxctly in the same way we ll proceed for the second
Direct labour material = $15600
books = 15000
total amount of books produced per dollar ll be = $15600/15000 = $1.04 per book
hence the actual production ll be = $ 14000 * 1.04 = $ 14560
hence the direct labour material quantity variance ll be = Actual direct labour material - 16800
= $15000 - 14560
= $440
i hope i ve given u the correct explanation.........
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