Required information Use the following information for the Exercises below. [The

Question

Required information

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

A manufactured product has the following information for June.

Exercise 21-9 Direct materials variances LO P2

Compute the direct materials price variance and the direct materials quantity variance. Indicate whether each variance is favorable or unfavorable.

AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price

Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable.

AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate

Standard Actual Direct materials (7 lbs. @ $9 per lb.) 60,100 lbs. @ $9.20 per lb. Direct labor (3 hrs. @ $16 per hr.) 25,300 hrs. @ $16.60 per hr. Overhead (3 hrs. @ $13 per hr.) $ 338,100 Units manufactured 8,500

Explanation / Answer

Solution 1:

Solution 2:

Direct Material Cost Variance Actual Cost Standard cost for actual quantity Standard Cost AQ * AP = AQ * SP = SQ * SP = 60100 $9.20 $552,920.00 60100 $9.00 $540,900.00 59500 $9.00 $535,500.00 $12,020 U $5400 U Direct Material Price Variance Direct Material Qty variance

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