Standard Quantity or Hours Standard Price or Rate Direct materials 6.8 pounds $

Question

Standard Quantity or Hours

Standard Price or Rate

  Direct materials

6.8 pounds

$ 2.90 per pound

  Direct labor

0.2 hours

$ 9 per hour

During the most recent month, the following activity was recorded:

a.

15,100 pounds of material were purchased at a cost of $2.60 per pound.

b.

All of the material purchased was used to produce 2,000 units of Zoom.

c.

300 hours of direct labor time were recorded at a total labor cost of $3,300.

Required:

Compute the materials price and quantity variances for the month.

Compute the labor rate and efficiency variances for the month.

Standard Quantity or Hours

Standard Price or Rate

  Direct materials

6.8 pounds

$ 2.90 per pound

  Direct labor

0.2 hours

$ 9 per hour

During the most recent month, the following activity was recorded:

Explanation / Answer

SQ/SH SP/SR Direct material 6.8 pounds $2.9 perpound Direct labour .2 hours $9 per hr Actual Material (AQ) 15100 pounds Actual Price (AP) $2.6 pounds Actual Production 2000 units Actual Labour hours(AH) 300 Actuar Labour per Hour $11 Actual cost of Labour $3,300 Standard material (SQ)(2000*6.8) 13600 Standard hours of labour (SH)(2000*.2) 400 Direct Material Price variance (AQ*AP)-(AQ*SP) in $ (15100*2.6)-(15100*2.9) -4530 4530 F Direct Material Quantity variance (SQ-AQ)*SP (13600-15100)*2.9 -4350 4530 U Direct labour rate variance (AQ*AR)-(AQ*SR) (300*11)-(300*9) 600 600 U Direct labour refficency variance (SH-AH)*SR (400-300)*9 900 900 F

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