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:

During the month of January, Crystal Charm made 1,610 charms. The company used 458 ounces of silver (total cost of $12,824) and 11,320 crystals (total cost of $3,169.60), and paid for 3,370 actual direct labor hours (cost of $55,605.00).

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.)

2. Calculate Crystal Charm’s direct labor variances 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.)

Standard Quantity Standard (Rate) Standard Unit Cost Silver 0.30 oz. $ 27.00 per oz. $ 8.10 Crystals 7.00 $ 0.30 per crystal 2.10 Direct labor 2.00 hrs. $ 17.00 per hr. 34.00

Explanation / Answer

Crystal Charm Silver Direct material price variance (Actual price - standard price)*AQ purchased (12,824         - 27*458 458 U direct material quantity variance (actual qty used - standard qty allowed)*standard rate (458   - 1610*.30)*27 675 F Cyrstals Direct material price variance (Actual price - standard price)*AQ purchased (3,169.60      - .30*11320) 226.4 F direct material quantity variance (actual qty used - standard qty allowed)*standard rate (11320   - 1610*7)*.3 15 U

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