The English Company uses a standard cost system. The current periods data regard

Q: The English Company uses a standard cost system. The current periods data regard

Solution: Direct Material Cost Variance Actual Cost Standard cost for actual quantity Standard Cost AQ * AP = AQ * SP = SQ * SP = 13600 $1.85 $25,160.00 13600 $2.00 $27,200.00 12000 $2.00 $24,000.00 $2,040 U $3,200 U Direct Material Price Variance Direct Material Qty variance

ID: 2391136 • Letter: T

Question

The English Company uses a standard cost system. The current periods data regarding production is as follows:

- Material purchased and used 13,600 pounds.

- Direct-labor costs incurred, 22,000 hours, $ 7.50 per hour.

- Variable-overhead costs incurred, $ 19,000.

- Finished units produced, 2,000.

- Actual material costs, $ 1.85 per pound

- Variable overhead rate, $ 1.60 per hour.

- Standard direct-labor cost, $ 8.00 per hour.

- Standard material cost, $ 2.00 per pound.

- Standard pounds of material in a finished unit, 6.

- Standard direct-labor hours per finished unit, 10.

Prepare schedules of the price and efficiency/quantity variances, for Direct

Material and Direct Labor (3 column variance analysis)..

Explanation / Answer

Solution:

Direct Material Cost Variance Actual Cost Standard cost for actual quantity Standard Cost AQ * AP = AQ * SP = SQ * SP = 13600 $1.85 $25,160.00 13600 $2.00 $27,200.00 12000 $2.00 $24,000.00 $2,040 U $3,200 U Direct Material Price Variance Direct Material Qty variance

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The English Company uses a standard cost system. The current periods data regard

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