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Quiz Saved Help Save & Exit Submit Check my work New Jersey Valve Company manufactured 7.600 units during January of a control valve used by milk processors in its Camden plant. Records indicated the following: Direct Labor 46,800 hr. at s15.20 per hr. Direct material purchased Direct material used 29,000 lb. at $2.40 per 1b. 28,300 lb. The control valve has the following standard prime costs: 4lb. at $2.30 per lb. 6 hr. at $15.60 per hr. $ 9.20 Direct material Direct 1abor 93.60 $102.80 standard prime cost per unit Required: 1. Prepare a schedule of standard production costs for January, based on actual production of 7.600 units. 2. For the month of January. compute the following variances. Complete this question by entering your answers in the tabs below. #: Next Prev1 of 1

Explanation / Answer

Solution 1:

Solution 2:

Material price variance = (SP - AP)* Actual quantity used

= ($2.30 - $2.40) * 28300 = $2,830 U

Material Quantity Variance = (SQ - AQ) * SP

= [(7600*4) - (28300)] * $2.30 = $4,830 F

Direct material purhcase price variance = (SP - AP) * Actual quantity purchased

= ($2.30 - $2.40) * 29000 = $2,900 U

Direct labor rate variance = (SR - AR) * AH

= ($15.60 - $15.20) * 46800 = $18,720 F

Direct labor efficiency variance = (SH - AH) * SR = [(7600*6) - 46800] * $15.60 = $18,720 U

New Jersey Valve Company - Camden Plant Schedule of Standard Production Cost Based on 7600 units For the month of January Particulars Standard Cost Direct Material (7600*4*$2.30) $69,920.00 Direct Labor (7600*6*$15.60) $711,360.00 Total $781,280.00

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