Direct Materials and Direct Labor Variances At the beginning of June, Cornerston

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Direct Materials and Direct Labor Variances

At the beginning of June, Cornerstone Printing Company budgeted 12,000 books to be printed in June at standard direct materials and direct labor costs as follows:

The standard materials price is $0.40 per pound. The standard direct labor rate is $11.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:

There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Cornerstone Printing Company actually produced 10,800 units during June.

Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials and Direct Labor Variances

At the beginning of June, Cornerstone Printing Company budgeted 12,000 books to be printed in June at standard direct materials and direct labor costs as follows:

Direct materials $14,400 Direct labor 5,280 Total $19,680

The standard materials price is $0.40 per pound. The standard direct labor rate is $11.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:

Actual direct materials $13,300 Actual direct labor 4,900 Total $18,200

There were no direct materials price or direct labor rate variances for June. In addition, assume no changes in the direct materials inventory balances in June. Cornerstone Printing Company actually produced 10,800 units during June.

Determine the direct materials quantity and direct labor time variances. Round your per unit computations to two decimal places, if required. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct materials quantity variance $ SelectFavorableUnfavorableItem 2 Direct labor time variance $ SelectFavorableUnfavorableItem 4

Explanation / Answer

Material quantity variance = Standard cost-actual cost

                                           = (14400/12000*10800)-13300

Material quantity variance = 340 Unfavourable

Labour Time variance = Standard cost-actual cost

                                     = (5280/12000*10800)-4900

Labour time variance = 148 Unfavourable

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