Crystal Charm Company makes handcrafted silver charms that attach to jewelry suc

Question

Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors Standard costs follow: Standard QuantityStandard (Rate) 0.40 oz. $23.00 per oz 5.00 0.40 per crystal 2.00 hrs. $12.00 per hr Standard Unit Cost Silver $ 9.20 Crystals 2.00 24.00 Direct labor During the month of January, Crystal Charm made 1,530 charms. The company used 577 ounces of silver (total cost of $13,848) and 7,700 crystals (total cost of $2,926.00), and paid for 3,210 actual direct labor hours (cost of $36,915.00) Required 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. (Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Answer is complete but not entirely correct. Silver Crystals 571.23$ 154.00F S 805.00F (20.00)U Direct Material Price Variance Direct Material Quantity Variance 2. Calculate Crystal Charm's direct labor variances for the month of January. (Round your intermediate calculations and final answers to 2 decimal places.lndicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Answer is complete and correct 1,605.00 0 F s (1,800.00) U Direct Labor Rate Variance |s Direct Labor Efficiency Variance

Explanation / Answer

direct material price variance = (actual quantity * standard price) - (actual quantity *actual price)

here,

actual quantity = 577 ounces.

standard price = $23 per ounce.

actual price = $13,848 /577 ounces =>$24 per ounce.

now,

direct material price variance = (577 ounces *$23) - (577*$24)

=>$13,271 - $13,848

=>$577 unfavourable....(as actual price is less than standard price, it is unfavourable).

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