Chapter 24 -) C |ezto.mheducation.com/hm.tpx 10.00 points Nolan Mills uses a sta

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Chapter 24 -) C |ezto.mheducation.com/hm.tpx 10.00 points Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pilloweases, using 27,500 yards of fabric costing $3 05 per yard and incurring direct labor costs of $16,794 for 3,110 hours of direct labor. The standard cost per pillowcase assumes 1.75 yards of fabric at $3.10 per yard, and 0.20 hours of direct labor at $5.95 per hour a. Compute both the price variance and quantity variance relating to direct materials used in the manufacture of pillowcases in May Indicate the effect of oach variance by selecting "Favorable" or Unfavorable". Select "None" and enter "0 for no effect (i.e., zero variance).) Materials price variance Materials quantity variance b. Compute both the rate variance and efficiency variance for drect labor costs incurred in manufacturing of each variance by selecting "Favorable" or pillowcases in ases in May. Indicate the effect Infavorable" to 2 decimal places.) Labor rate variance Labor efficiency variance References eBook & Resources

Explanation / Answer

Solution:

Material Price Variance = ( Standard price per yard - Actual price per yard ) * Actual Quantity Material price variance = ( $ 3.10 -3 .05) * 27,500 1,375 Standard price per yard 3.10 Actual price per yard 3.05 Actual Quantity - 27,500 Material Quantity Variance ( Standard Quantity - Actual Quantity ) * Standard Price per yard Material Quantity Variance -3875 Standard quantity - 15,000 * 1.75 26250 Actual Quantity - 27500 Standard price per yard 3.10

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