During May, Joliet Fabrics Corporation manufactured 500 units of a special multi

Question

During May, Joliet Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May. Direct material purchased: 18,000 yards at $1.38 per yard Direct material used: 9,500 yards at $1.38 per yard Direct labor: 2,100 hours at $9.15 per hour $24,840 13,110 19,215 The standard prime costs for one unit of Stylex are as follows Direct material: 20 yards at $1.35 per yard Direct labor: 4 hours at $9.00 per hour Total standard prime cost per unit of output $ 27 36 $ 63 Required: Compute the following variances for the month of May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter"0" for no effect (i.e., zero variance). Answer is complete but not entirely correct Direct-material price variance $ 285Unfavorable 2.Direct-material quantity variance $ (675) Favorable Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance $960 Unfavorable Unfavorable 900 Unfavorable 4 (315) $

Explanation / Answer

Direct material purchase price variance = (Standard price-actual price)actual quantity purchased

= (1.35-1.38)*18000

Direct material purchase price variance = 540 Unfavorable

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