Direct Materials and Direct Labor Variance Analysis Fancy Fixture Company manufa
ID: 2463164 • Letter: D
Question
Direct Materials and Direct Labor Variance Analysis Fancy Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 100 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows: Standard wage per hr. $21.00 Standard labor time per faucet 20 min. Standard number of lbs. of brass 5 lbs. Standard price per lb. of brass $2.80 Actual price per lb. of brass $2.72 Actual lbs. of brass used during the week 59,875 lbs. Number of faucets produced during the week 11,820 Actual wage per hr. $21.40 Actual hrs. for the week 4,000 hrs. Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit $ Direct labor standard cost per unit $ Total standard cost per unit $ 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. Price variance $ Favorable Quantity variance $ Unfavorable Total direct materials cost variance $ Favorable 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. Rate variance $ Unfavorable Time variance $ Unfavorable Total direct labor cost variance $ Unfavorable
Explanation / Answer
Solution :
Direct material (5lbs * $2.8 per lbs
14
direct labor (20min* $21/60min)
7
Total
21
b..
Qty
Rate
total
Material
Standard
59100
2.80
165480
11820*5
actual
59875
2.72
162860
Direct material Price variace
(AR-SR)*AQ
-4790
F
(2.72-2.80)*59875
Direct material Quantity variace
(AQ-SQ)*SR
2170
U
(59875-59100)*2.8
total direct materials cost variance
total actual cost - total standard cost
-2620
F
162860-165480
Hours
Rate
Total
Labour
Standard
3940
21.00
82740
11820*20/60
actual
4000
21.40
85600
Direct Labour rate variace
(AR-SR)*AH
1600
U
(21.40-21)*4000
Direct LABOUR TIME variace
(AH-SH)*SR
1260
U
(4000-3940)*21
total direct labor cost variance.
total actual cost - total standard cost
2860
U
85600-82740
- standard cost per unit
Direct material (5lbs * $2.8 per lbs
14
direct labor (20min* $21/60min)
7
Total
21
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