Averill Corporation manufactures windmills made of fabric using a standard costi

Question

Averill Corporation manufactures windmills made of fabric using a standard costing system. Averill allocates overhead based on the number of direct labor hours. The following are the company's cost and standards data: Calculate the standard cost of one windmill: Calculate direct material variances. Enter as a positive if favorable and negative if unfavorable. Direct material price variance: Direct material quantity variance: Calculate direct labor variances. FOR 3a ONLY, ENTER AS A NEGATIVE IF FAVORABLE AND POSITIVE IF UNFAVORABLE. For 3b, ENTER AS A POSITIVE IF FAVORABLE AND NEGATIVE IF FAVORABLE. Direct labor rate variance: Direct labor efficiency variance:

Explanation / Answer

Particulars Standard Actual Qty Rate amount Qty Rate amount Materials            45,600.00                    14.00         638,400.00            43,480.00                    12.59         547,552.00 Labour            14,400.00               10.6000         152,640.00              8,210.00                    11.29            92,676.00 Actual output              2,400.00 Materials reqd(2,400*19)            45,600.00 Labour hrs reqd(2,400*6)            14,400.00 2A DMPV = (SP-AP)*AQ Purchased DMPV = (14 - 12.59)43,480 DMPV = 61,168 F 2B DMQV= (SQ-AQ)SP DMQV= (45,600 - 38,100)14 DMQV= 105,000 F 3A DLRV= (SR-AR)AH DLRV= (10.6-11.29)8,210 DLRV= 5,650 U 3B DLEV = (SH-AH)SR DLEV = (14,400 - 8,210)10.6 DLEV = 65,614 F

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