Silmon Corporation makes a product with the following standard costs: Silmon Cor
ID: 2450699 • Letter: S
Question
Silmon Corporation makes a product with the following standard costs:
Silmon Corporation makes a product with the following standard costs: In June the company produced 4,800 units using 27,650 grams of the direct material and 2,640 direct labor-hours. During the month the company purchased 24,700 grams of the direct material at a price of $6,80 per gram. The actual direct labor rate was $14,60 per hour and the actual variable overhead rate was $1,90 per hour. The materials price variance is computed when materials are purchased. Required: Compute the following variances for raw materials and direct labor, assuming that the price variance for materials is recognized at point of purchase:Explanation / Answer
Answer - A Direct material quantity varaiance =
= (Actual usage in units - Standard usage in units) x Standard cost per unit
= (27650 - (5.5*4800))*7
= (27650-26400)*7
= 1250*7
= 8750 (U)
Answer B Direct Material Price Varaince =
= (Actual price - Budgeted price) x Actual quantity
= (6.80-7.00) *27650
= 0.20*27650
= 5530 (F)
Answer -C Direct Labor Effieciency Varaince =
= (Actual hours - Standard hours) x Standard rate
= (2640-2400)*14
= 240*14
= 3360 (U)
Answer (D) Direct Labour Rate Variance =
= (Actual rate - Standard rate) x Actual hours worked
= (14.60-14.00) *2640
= 0.60*2640
= 1584 (U)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.