Each unit requires 0.25 hour of direct labor Required: a. Determine the direct m

Question

Each unit requires 0.25 hour of direct labor Required: a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Price variance Quantity variance Total direct materials cost variance b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Rate variance Time variance Total direct labor cost variance c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Variable factory overhead controllable variance Fixed factory overhead volume variance Total factory overhead cost variance

Explanation / Answer

Direct materials price variance = actual quantity ( standard price - actual price)

= 228700 ($5.10 - $5.00)

= $22870 favourable

Direct materials quantity variance = standard price (standard quantity - actual quantity)

= $5.10 (231000 - 228700)

= $11730 favourable.

Direct materials cost variance = $22870 + $11730

= $34600 favourable.

Direct labor rate variance = actual hours(standard rate - actual rate)

= 17900 hours ($16.80 - $17.20)

= ($7160) unfavourable

Direct labor efficiency variance = standard rate (standard hours - actual hours)

= $16.80(17500 - 17900)

= ($6720) unfavourable

Direct labor cost variance = $7160 + $6720

= $13880un favourable.

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