Hutto Corp. has set the following standard direct materials uct it manufactures.

Question

Hutto Corp. has set the following standard direct materials uct it manufactures. Direct materials (15 lbs. $4 per lb.) Direct labor (3 hrs. $15 per hr.) $60 45 During May the company incurred the following actual costs to produce 9,000 units. Direct materials (138,000 lbs. $3.75 per lb.) Direct labor (31,000 hrs. $15.10 per hr.). $517,500 468,100 AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price AH Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is unfavorable tavorable or

Explanation / Answer

Direct materials Actual cost Standard cost AQ * AP AQ * SP SQ * SP 138000 * 3.75 138000 * 4 135000 * 4 517500 552000 540000 34500 12000 direct materials price variance 34500 F direct materials qty variance 12000 U total direct materials variance 22500 F Direct labor Direct labor Actual cost Standard cost AH * AR AH * SR SH * SR 31000 * 15.1 31000 * 15 27000 * 15 468100 465000 405000 3100 60000 direct materials price variance 3100 U direct materials qty variance 60000 U total direct materials variance 63100 U

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