Direct material efficiency variance? Direct labour price variance? Direct labour

Question

Direct material efficiency variance?

Direct labour price variance?

Direct labour efficiency variance?

Exercise 11.28 The managers of Nakatani Enterprises established the following standards for Model 535 Price Standard $2.50 per kg Quantity standard Direct materials 0.7 kg per unit Direct labour 0.2 hours per unit 17.40 per hour Last month, 15,388 units of Model 535 were produced at a cost of $25,620 for direct materials and $49,050 for direct labour. A total of 11,626 kllograms of direct materials was used. Total direct lahour hours amounted to 2,787 hours. During the same period, 11,000 kilograms of direct material were purchased for $26,450. The company's policy is to record materials price variances at the time materials are purchased ? (a) E Your answer is correct. What is the total standard cost for direct materials and direct labour for the output this period? (Round entry to 2 decimal places, e.g. 15.25.) Standard Cost 80479.24 LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 5 of 5 used

Explanation / Answer

Direct material price variance = (2.5*11000-26450) = 1050 F

Direct material efficiency variance = (15388*.7-11626)*2.5 = $2136 U

Direct labour price variance = (17.4*2787-49050) = $556.20 U

DIrect labour efficiency variance = (15388*0.2-2787)*17.40 = 5056.44 F

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