Direct Materials and Direct Labor Variance Analysis Required: a. Determine the s

Question

Direct Materials and Direct Labor Variance Analysis

Required:

a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to two decimal places, if necessary. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct materials standard cost per unit $ Direct labor standard cost per unit $ Total standard cost per unit $

Explanation / Answer

Actual Hours x Standard Rate - Standard Hours x Standard Rate

a) Direct materials standard cost per unit 57.2 Direct labor standard cost per unit 4.2 (16.8*15/60) Total standard cost per unit 61.4 Workings: Std number of lbs of zinc 2.6 std price 22 Direct materials standard cost per unit 57.2 b) DM Price Variance = ( SP AP ) × AQ Where,    SP is the standard unit price of direct material    AP is the actual price per unit of direct material    AQ is the actual quantity of direct material used =(22-21.85)*31750 4762.5 F DM Quantity Variance = ( SQ AQ ) × SP Where,    SQ is the standard quantity allowed    AQ is the actual quantity of direct material used    SP is the standard price per unit of direct material =(31200-31750)*22                                                                                       (12,100.00) U SQ= 12000*2.6 31200 total direct materials cost variance=                                                                                         (7,337.50) U c) Rate variance= AH*(AR-SR) 3200*(17-16.8) 640 U

Actual Hours x Standard Rate - Standard Hours x Standard Rate

3200*16.8- 12000*.25*16.8                                                                                           3,360.00 U Total direct labor cost variance                                                                                           4,000.00 U

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