During April, Dryden Company\'s material purchases amounted to 13,520 pounds at

Question

During April, Dryden Company's material purchases amounted to 13,520 pounds at a price of $6.60 per pound. Actual costs incurred in the production of 2,600 units were as follows Direct labor $222,606 ($16.60 per hour) Direct material: $70,686 ($6.60 per pound) The standards for one unit of Dryden Company's product are as follows Direct Labor: Direct Material: Quantity, 5 hours per Quantity, 4 pounds per unit unit Rate, $16.00 per hour Price, $6.10 per pound Required: Fill in the amounts in the tables below. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance) Direct-Material Price and Quantity Variances Project Material Cost Actual Material Cost Standard Material Cost Actual Quantit Actual Quantit Standard Price Standard Quantit Actual Price Standard Price pounds used per pound pounds used per pound pounds allowed per pound Direct-material price variance Direct-material quantity variance Direct-material variance

Explanation / Answer

Answer 1)

Actual cost = $70686

Price per cost = $6.60 per pound

No. Of material pound = 70686/6.60 = 10710 pound

Actual material cost = Actual quantity* Actual cost

= 10710*6.60 = $70686

Answer 2)

project material cost = Actual quantity *Standard cost

= 10710*6.10 = $65331

Answer 3)

Standard units is always based on actual output

Standard units = 2600*4 =10400 pounds

Standard material cost = standard units *standard price

= 10400*6.10 = $63440

Now,

Direct Material price variance = projected material cost-actual material cost

= 65331-70686 = $5355 Adverse

Direct Material Quantity Variances = Standard Materials cost - Projected material Cost

= 63440 - 65331 = $1891 Adverse

Direct Material Variances = Standard Material Cost - Actual Material Cost

= 63440 - 70686 = $7246 Adverse

Direct Material purchase price variances = Units Purchase*( Actual Price - Standard Price)

= 13520 (6.60-6.10)

= $6760 Adverse Variances

Answer 4)

Actual Labour hours = 222606/16.60= 13410 hours

Actual Labour cost = Actual Hours * Cost per hour

= 13410*16.60= $222606

Answer 5)

Projected material cost = Actual hours * Standard Rate

= 13410*16.00 = $214560

Answer 6)

Standard hours = 2600*5 = 13000 hours

Standard Labour Cost = Standard hour* Cost per hour

= 13000*16 = $208000

Now,

Direct Labour rate variances = Projected Labour cost - Actual Labour Cost

= 214560 -222606 = $8046 Adverse

Direct Labour efficiency Variance = Standard Labour Cost - Projected material Cost

= 208000-214560

= $6560 Adverse

Direct Labour Varinces = Standard Labour Cost - Actual Labour Cost

= 208000-222606 = $14606 Advers

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