Direct Materials and Direct Labor Variance Analysis Abbeville Fixture Company ma

Question

Direct Materials and Direct Labor Variance Analysis

Abbeville Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 30 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 unit 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. Round your answers to the nearest whole dollar. 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. Round your answers to the nearest whole dollar. 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 15 min. Standard number of lbs. of brass 1.2 lbs. Standard price per lb. of brass $11.00 Actual price per lb. of brass $11.25 Actual lbs. of brass used during the week 8,899 lbs. Number of faucets produced during the week 7,200 Actual wage per hour $17.92 Actual hours for the week (30 employees × 40 hours) 1,200 hrs.

Explanation / Answer

a.

b.

Total Direct Materials Cost Variance

c.

$ (5,074)

Direct materials standard cost per unit (1.2 lbs * 11 per lb) $ 13.2 Direct labor standard cost per unit (0.25 hours * 17.4 per hour) $ 4.35 Total standard cost per unit $ 17.55

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