1. The Dress for Success Pants Company manufactures off the rack dress pants fro
ID: 2372185 • Letter: 1
Question
1. The Dress for Success Pants Company manufactures off the rack dress pants from a special fabric. The standard material cost for making one pair of is as follows: 5 yards of fabric at $5 per yard....$25.00
During the prior month the Company made 3,500 dress pants using 18,200 yards of fabric at a total cost of $86,450.
Please compute each of the following:
1. The material price variance
2. The material quantity variance
3. The total material variance
-Please show work!
2. The Dress for Success Pants Company manufactures off the rack dress pants from a special fabric. The standard labor cost for making one pair of pants is as follows: 3 hours of labor at $15 per labor hour....$45.00
During the prior month the Company made 3,500 dress pants using 11,000 hours of labor at a total labor cost of $154,000.
Please compute each of the following:
1. The labor rate variance
2. The labor efficiency variance
3. The total labor variance
-Please show work!
Explanation / Answer
1.
Where,
SP is the standard unit price of direct material
AP is the actual price per unit of direct material
AQ is the actual quantity of direct material used
material Price Variance = (5-86,450/18200)*18,200 =$4550
Where,
SQ is the standard quantity allowed
AQ is the actual quantity of direct material used
SP is the standard price per unit of direct material
Material Quantity Variance = (5*3500 - 18,200)*5 =-$3500
total material variance = $4550+ -$3500 =$1050
2.
Where,
SR is the standard direct labor rate
AR is the actual direct labor rate
AH are the actual direct labor hours
Labor rate variance (15-154,000/11000)*11000 = $11000
labor efficiency variance =
Where,
SH are the standard direct labor hours allowed
AH are the actual direct labor hours used
SR is the standard direct labor rate per hour
labor efficiency variance = (3*3500 - 11000)*15 =-$7500
total labor variance = $11000 -$7500 =$3500
material Price Variance = ( SP − AP ) × AQRelated Questions
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