The standard costs and variances for direct materials, direct labor, and factory

Question

The standard costs and variances for direct materials, direct labor, and factory overhead for the month of May are as follows: Variances Standard Cost Unfavorable Favorable Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $ 85,000 Price variance . . . . . . . . . . . . . . . . . . . . . . . $5,000 Quantity variance . . . . . . . . . . . . . . . . . . . . . $3,000 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 Rate variance . . . . . . . . . . . . . . . . . . . . . . . . 2,700 Efficiency variance . . . . . . . . . . . . . . . . . . . . 6,200 Manufacturing overhead . . . . . . . . . . . . . . . . . 300,000 Spending variance . . . . . . . . . . . . . . . . . . . . 4,000 Volume variance . . . . . . . . . . . . . . . . . . . . . . 5,000 Determine the actual costs incurred during the month of May for direct materials, direct labor, and manufacturing overhead.

Explanation / Answer

Actual costs incurred: Direct materials = 85000+5000-3000 = $87000 Direct labor = 150000-2700+6200= $153500 Manufacturing overhead = 300000-4000-5000 = $291000

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