Sonne Company produces a perfume called Whim. The direct materials and direct la

Question

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

Compute the direct materials price and quantity variances for the month. (Input all amounts as positive values. Do not round your per unit rates. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Compute the direct labor rate and efficiency variances for the month. (Input all amounts as positive values. Do not round your per unit rates, round other intermediate calculations and your final answer to nearest whole dollar. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below:

Explanation / Answer

Hi,

Please find the answers as follows:

a)

Material Price Variance = Actual Quantity of Material Purchased*(Actual Rate - Standard Rate) = 22900*(2.7 - 3) = 6870 (Favorable)

Material Quantity Variance = Standard Rate*(Actual Quantity Used - Standard Quantity) = 3*(22900 - 6.8*3000) = 7500 (Unfavorable)

b)

Labor Rate Variance = Actual Hours*(Actual Rate - Standard Rate) = 1400*(18200/1400 - 11) = 2800 (Unavorable)

Labor Efficiency Variance = Standard Rate*(Actual Hours - Standard Hours) = 11*(1400 - .5*3000) = 1100 (Favorable)

Thanks.

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