Crystal Charm Company makes handcrafted silver charms that attach to jewelry suc

Question

Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Standard Quantit 0.25 oz. $29.00 per oz. 4.00 $ 0.40 per crystal 2.00 hrs. $18.00 per hr Standard Unit Cost Standard (Rate) Silver $ 7.25 Crystals Direct labor 1.60 36.00 During the month of January, Crystal Charm made 1,600 charms. The company used 375 ounces of silver (total cost of $11,250) and 6,450 crystals (total cost of $2,451.00), and paid for 3,350 actual direct labor hours (cost of $58,625.00) Required 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. (Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Silver Crystals Direct Material Price Variance Direct Material Quantity Variance 2. Calculate Crystal Charm's direct labor variances for the month of January. (Round your intermediate calculations and final answers to 2 decimal places.Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance

Explanation / Answer

Answer

1)

Material variance :

2 )

Labour variance :

Labour rate variance = (18*3350-58625) = 1675 F

Labour efficiency variance = (1600*2-3350)*18 = 2700 U

Silver Silver Crystals Crystals Material price variance (29*375-11250) = 375 U (0.40*6450-2451) = 129 F material quantity variance (1600*0.25-375)*29 = 725 F (1600*4-6450)*0.40 = 20 U

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