5. (28 points) The following standard costs were developed for one of the produc

Question

5. (28 points) The following standard costs were developed for one of the products of Harper Company STANDARD COST CARD PER UNIT Materials: 4 lbs. x $10 per lb Direct labor: 2 hours x $15 per hour Variable overhead: 2 hours x $8 per hour Fixed overhead: 2 hours x $12 per hour $40.00 30.00 16.00 24.00 Total standard cost per unit $110,00 The following information is available regarding the company's operations for the period. Units produced Materials purchased and used Actual direct labor costs 3,000 lbs. $11 per lb 21,000 hours costing $294,000 Required: a. Calculate the direct materials price variance. b. Calculate the direct materials quantity variance. c. Calculate the direct labor rate variance. ( 10)X Rooo-L Rio: h _A 094c 0-1 ,093 980 Calculate the direct labor efficiency (time) variance. B-A d.

Explanation / Answer

a Direct materials price variance=43000*(11-10) = $43000 Unfavorable b Direct materials quantity variance=11*(43000-11000*4)= 11000 Favorable c Direct labor rate variance=294000-(21000*15)= 21000 Favorable d Direct labor efficiency variance=15*(21000-11000*2)= 15000 Favorable

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