Calculate the direct materials price and usage variance and the direct labor rat

Question

Calculate the direct materials price and usage variance and the direct labor rate and efficiency variance for Darla’s Desk’s based on the information given.

Direct Material: 2 pounds of wood per desk, $100 per pound of wood

Direct Labor: 1.5 hours per desk, $20 per hour

Darla’s made 1,000 desks in June

Actual Results:

2,500 pounds of wood was purchased at a total cost of $257,500

2,300 pounds of wood was used in production

1,650 hours were worked at a total cost of $37,950

Would really appreciate the help on this one! thank you!

Explanation / Answer

Actual Used material 2300 2300 pounds budgeted cost (2300*100) 230000 Actual cost 257500/2500*2300 236900 DM price variance -6900 1000 units should have used (1000× 2pounds) 2000 But actually used 2300 Usage variance in pounds -300 x std cost per kg 100 Usage variance -30000 Actual hrs 1650 Actual rate (37950/1650) 23 AH*AR 37950 SR 20 AH*SR 33000 Rate variance 4950 AH*SR 33000 SH (1.5/1*1000) 1500 SR 20 30000 DL quantity Variance 3000

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