Written Assignment #3-Material and labor variances FOR 25 ASSIGNMENT POINTS.....
ID: 2471360 • Letter: W
Question
Written Assignment #3-Material and labor variances
FOR 25 ASSIGNMENT POINTS...............Complete the following:
The following data pertain to the first week of operations during June:
Materials:
Actual purchases........................................1500 units @$3.80/unit
Actual usage...............................................1350 units
Standard usage...........................................1020 units @$4.00/unit
Labor:
Actual hours...............................................310 hours @ $12.10/hour
Standard hours...........................................340 hours @ $12.00/hour
Complete the three material variances and the two labor variances.
Explanation / Answer
Material Price Variance
= (Actual price – standard price) x actual purchase
= ($3.80/unit - $4/unit) x 1500 unit
= $300 F
Material Quantity Variance
= (actual usage – standard usage) x standard price
= (1350 units – 1020 pounds) x $4 / units
= $1320 U
Total Material Variance
= Material price variance + material usage variance
= $300F + $1320U
= $1020 U
2)
Labour rate variance
= (Actual labour rate – standard labour rate) x Actual usage of labour
= ( $12.10/hour - $12/hour) x 310 hours
= $31 U
Labour efficiency variance
= (actual usage – standard usage) x standard rate
= (310 hours – 340 hours) x $12/hour
= $360 F
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