Crystal Charm Company makes handcrafted silver charms that attach to jewelry suc

Question

Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Standard QuantityStandard (Rate) 0.35 oz. $31.00 per oz. 6.00 $ 0.50 per crystal 2.00 hrs. $20.00 per hr Standard Unit Silver Crystals Direct labor $10.85 3.00 40.00 During the month of January, Crystal Charm made 1,620 charms. The company used 542 ounces of silver (total cost of $17,344) and 9,770 crystals (total cost of $4,689.60), and paid for 3,390 actual direct labor hours (cost of $66,105.00)

Explanation / Answer

1) Material variance :

Labour variance :

Labour rate variance = (20*3390-66105) = 1695 F

Labour efficiency variance = (1620*2-3390)*20 = 3000 U

Silver Silver Crystals Crystals Material price variance (31*542-17344) = 542 U (0.50*9770-4689.60) = 195.40 F material quantity variance (1620*0.35-542)*31 = 775 F (1620*6-9770)*0.50 = 25 U

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