My questions are posted 5. (28 points) The following standard costs were develop
ID: 2540530 • Letter: M
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My questions are posted
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 Material price variance = (Standard Price - Actual price ) x Actual quantity
= ($10 - $11) x 43,000 = $43,000 Unfavorable
b. Direct Material quantity variance = (Standard Quantity - Actual Quantity) x Standard Price
= (4 x 11000 - 43,000) x $10= $10,000 Favorable
c. Direct labor rate variance = (Standard rate- Actual rate ) x Actual hours
= ($15 - $294,000 / 21,000) x 21,000= $21,000 Favorable
d. Direct labor efficiency variance = (Standard hours- Actual hours ) x Standard rate
= (11,000 x 2 - 21,000) x $15= $15,000 Favorable
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