Best Faucet Company manufactures faucets in a small manufacturing facility. The

Question

Best Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:

Required:

a. Determine the standard cost per faucet 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. 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.

Standard wage per hour $17.40 Standard labor time per faucet 10 min. Standard number of lbs. of zinc 2.2 lbs. Standard price per lb. of zinc $10.50 Actual price per lb. of zinc $10.75 Actual lbs. of zinc used during the week 16,300 lbs. Number of faucets produced during the week 7,200 Actual wage per hour $17.90 Actual hours per week 2,400 hrs.

Explanation / Answer

Best Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:

Required:

a. Determine the standard cost per faucet 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Materials price variance = (Standard Price - Actual Price)* Actual Qty

Materials price variance = (10.50 - 10.75)*16300

Materials price variance = $ 4075 Unfavorable

Materials quantity variance = (Standard Qty - Actual Qty)Standard Price

Materials quantity variance = (15840-16300)*10.50

Materials quantity variance = $ 4830 Unfavorable

Materials Cost variance = (Standard Qty*Standard Price - Actual Qty*Actual price)

Materials Cost variance = (15840*10.50 - 16300*10.75)

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.

Labor Rate variance = (Standard Rate - Actual Rate)* Actual Hour

Labor Rate variance = (17.40-17.90)*2400

Labor Rate variance = $ 1200 Unfavorable

Labor Time variance = (Standard Hour - Actual Hour)Standard Rate

Labor Time variance = (1200 - 2400)*17.40

Labor Time variance = $ 20880 Unfavorable

Total direct labor Cost variance = (Standard Hour*Standard Rate - Actual Hour*Actual Rate)

Total direct labor Cost variance = (17.40*1200 - 17.90*2400)

Total direct laborCost variance = $ 22080 Unfavrorable

Standard wage per hour $17.40 Standard labor time per faucet 10 min. Standard number of lbs. of zinc 2.2 lbs. Standard price per lb. of zinc $10.50 Actual price per lb. of zinc $10.75 Actual lbs. of zinc used during the week 16,300 lbs. Number of faucets produced during the week 7,200 Actual wage per hour $17.90 Actual hours per week 2,400 hrs.

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