The following actual and standard cost data for direct material and direct labor
ID: 2522197 • Letter: T
Question
The following actual and standard cost data for direct material and direct labor relate to the production of 2,000 units of a product: Actual Costs Standard Costs Direct material 21,450 lbs. @ $5.30 22,000 lbs. @ $5.10 Direct labor 34,100 hrs. @ $8.40 33,000 hrs. @ $8.70 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable. Materials Variances Actual cost: $Answer Split cost: $Answer Standard cost: $Answer a. Materials price $Answer AnswerFU b. Materials efficiency $Answer AnswerFU Labor Variances Actual cost: $Answer Split cost: $Answer Standard cost: $Answer c. Labor rate $Answer AnswerFU d. Labor efficieny $Answer AnswerFU
Explanation / Answer
Answer a Material price variance = [Actual quantity of raw material * Actual price] - [Actual quantity of raw material * Standard price] Material price variance = [21450 lbs * $5.30] - [21450 lbs * $5.10] = $113685 - $109395 = $4290 U Answer b Material Efficiency Variance = [Actual quantity of raw material * Standard price] - [Standard quantity of raw material * Standard price] Material Efficiency Variance = [21450 lbs * $5.10] - [22000 lbs * $5.10] = $109395 - $112200 = $2805 F Answer c Labour rate variance = [Actual labour hours * Actual labour rate] - [Actual labour hours * standard labour rate] Labour rate variance = [34100 labour hours * $8.40] - [34100 labour hours * $8.70] = $286440 - $296670 = $10230 F Answer d Labour efficiency variance = [Actual labour hours * Standard labour rate] - [Standard labour hours * standard labour rate] Labour efficiency variance = [34100 labour hours * $8.70] - [33000 labour hours * $8.70] = $296670 - $287100 = $9570 U
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.