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ezto mheducation.com e.SteRxg ot Factoring Cal.ee Math Hep Let's All Os story WIRED www.stageead.como pe Chaoter 3 E9-5 Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4] Crystal Charm Company makes handcrafted silver charms that attach to follow jewelry such as a necklace or bracelet Each charm is adomed with two orystals of various colors. Standard costs QuanityStandand (Rabe) Unit Cont 0.30 az S21 00 per oz. 3.00 030 per crystal 2.00 hrs. $1000 per ht $ 6.30 0.90 20.00 Crystals Direct labor During the month of January Crystal Charm made 1,510 charms. The company used 428 ounces of slver (total cost of $9.416) and 4,580 crystals (total cost of $1,282.40) and paid for 3,270 actual direct labor hours (cost of $31,065.00). t. Calculate Crystal Charm's direct materials variances for siver and stals for the month of January (Round your intermediate calculations and final answers to 2 decanal plac indicate the effect of each variance by selecting ?-for favorable, "U" for unfavorable.) Material Price Variance Direct Diroct Material Quandity Vañance 2. Calculete Crystal each variance by selecting "F" for favorable, "U" for unfavorable.) 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

Explanation / Answer

1) Silver Crystals Direct Material Price Variance $ 428.00 U $    91.60 F Direct Material Quantity varinace $ 525.00 F $    15.00 U Working: Silver: a. Direct Material Price Variance = (Standard Price - Actual Price)*Actual Material Quantity used = (21.00-22.00)*428 = $       428.00 U b. Actual price of material used = Actual cost /Actual quantitty of materials used = $         9,416 / 428 = $         22.00 c. Direct Material Quantity varinace = (Standard Quantity-Actual Quantity)*Standard price of material = (453-428)*21.00 = $       525.00 F d. Standard quantity of material = Actual output*Standard quantity per unit = 1510*0.30 =           453.00 Crystals: a. Direct Material Price Variance = (Standard Price - Actual Price)*Actual Material Quantity used = (0.30-0.28)*4580 = $         91.60 F b. Actual price of material used = Actual cost /Actual quantitty of materials used = $   1,282.40 / 4580 = $            0.28 c. Direct Material Quantity varinace = (Standard Quantity-Actual Quantity)*Standard price of material = (4530-4580)*0.30 = $         15.00 U d. Standard quantity of material = Actual output*Standard quantity per unit = 1510*3.00 =              4,530 2) Direct Labor rate Variance $   1,635.00 F Direct Labor efficiency variance $   2,500.00 U Working: a. Direct Labor rate Variance = (Standard rate-Actual rate)*Actual Labor hours = (10.00-9.50)*3270 = $   1,635.00 F b. Actual labor rate = Actual labor cost/Actual labor hours = $ 31,065.00 /         3,270 = $            9.50 c. Direct Labor eficiency Variance = (Standard Labor hours - actual Labor hours)*Standard Labor rate = (3020-3270)*10.00 = $   2,500.00 U d. Standard Labor rate = Actual output*Standard Labor hours per unit of output = 1510*2.00 = 3020

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