The Koski Company has established standards as follows: Direct material 3 lbs. @

Question

The Koski Company has established standards as follows:
Direct material 3 lbs. @ $4/lb. standard price
Direct labor 2 hrs. @ $8/hr. standard rate
Actual production figures for the past year were as follows:
Units produced 500
Direct material used 1,600 pounds
Direct material purchased (3,000 lbs.) $12,300
Direct labor cost (950 hours) $ 7,790

Materials price variance is:
a) $160 U
b) $6,300 U
c) $300 U
d) $150 U

Materials quantity variance is:
a) $400 U
b) $410 F
c) $410 U
d) $6,000 U

Labor rate variance is:
a) $210 F
b) $190 F
c) $399 F
d) $190 U

Labor efficiency variance is:
a) $400 F
b) $800 F
c) $800 U
d) $500 F

Explanation / Answer

12,300- 3,000*4= 300U C) (1,600-500*3)*4= 400U A) (8.20- 8.00)*950= 190U D) (950- 500*2)*8= 400F A)

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