The following information describes production activities of Mercer Manufacturin

Question

The following information describes production activities of Mercer Manufacturing for the year Actual direct materials used35,000 lbs. at $6.00 Actual direct labor used Actual units produced per lb. 11,050 hours for a total of $230,945 66,000 Budgeted standards for each unit produced are 0.50 pounds of direct material at $5.95 per pound and 10 minutes of direct labor at $21.90 per hour AQ Actual Quantity SO Standard Quantity AP = Actual Price SP = Standard Price AH Actual Hours SH Standard Hours AR = Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances (2) Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. Complete this question by entering your answers in the tabs below Required 1 Required 2 Compute the direct materials price and quantity variances. (Do not round intermediate calculations.) Standard Cost Required 2>

Explanation / Answer

Actual cost Standard cost AQ X AP AQ X SP SQ X SP 35000 X $6.00 35000 X 5.95 33000 X 5.95 $210,000 208250 196350 $1,750 U 11900 U Standard Qty=66000*.5 33000 Direct Material price variance $1,750 U Direct Material Efficiency variance 11900 U Total Direct material variance $13,650 U Actual cost Standard cost AH X AR AH X SR SH X Sr 11050 X $20.90 11050 X 21.9 11000 X 21.9 $230,945 241995 240900 $11,050 F 1095 U Standard hours=66000*10/60 11000 Direct labor rate variance $11,050 F Direct labor Efficiency variance 1095 U Total Direct labor variance $9,955 F If any doubt please comment. If satisfied you can rate the answer

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