3. Camisa Company produces single-colored T-shirts. Materials for the shirts are

Question

3. Camisa Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for the changeover of a given batch have been established Direct materials (2.5 lbs.@$0.90) Direct labor (0.75 hr.@ $7.00) Standard Prime Cost $2.25 5.25 $7.50 During the year, 53,000 pounds of material were purchased and used for the changeover activity. There were 20,000 batches produced, with the following actual prime costs: Direct materials Direct labor $42,000 102,000 (for 14,900 hrs) Required Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable and unfavorable.

Explanation / Answer

Material price variance = (Standard price-actual price) Actual quantity

= (0.90*53000-42000)

Material price variance = 5700 F

Material quantity variance = (Standard quantity-actual quantity)Standard price

= (20000*2.5-53000)*0.90

Material quantity variance = 2700 U

Labour rate variance = (Standard rate-actual rate) actual hours

= (7*14900-102000)

Labour rate variance = 2300 F

Labour quantity variance = (Standard hour-actual hour)Standard rate

= (20000*0.75-14900)*7

Laboour quantity variance = 700 F

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

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