le, has provided the following information: Standards: Direct materials Direct l

Question

le, has provided the following information: Standards: Direct materials Direct labor Variable ov Fixed overhead Per unit 5 lb@$3.50/b $17.50 2 hours @ $12/hour 24.00 erhead 2 hours @$10/hour 20.00 15.00 Total $76.50 Budgeted production = 5,000 units Actual results Direct materials Direct labor Variable overhead Fixed overhead Units produced 30,100 lbs $107,470 11,120 actual hours $139,600 $108,210 $76,300 5,400 units Calculate the: a. direct materials price variance. b. direct materials quantity variance. c. direct labor rate variance. d. Provide all the necessary journal entries

Explanation / Answer

a. Direct materials price variance = (standard price - actual price) * actual quantity

= ($3.50 - $3.57) * 30100

= ($2107) unfavourable.

b. Direct materials quantity variance = (standard quantity - actual quantity) * standard price

= (25000 - 30100) * $3.50

= ($17850) unfavourable.

c. Direct labor rate variance = (standard rate - actual rate) * actual hours

= ($12 - $12.55) * 11120 hours

= ($6116) unfavourable.

d.

Journal entry:

Materials $105350

Material price variance $2107

To Accounts payable $107457

Work in process $87500

Material quantity varaiance $17850

To materials $105350.

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.