Hours or Rate Cost Direct materials Direct labor 4.6 pounds 2.50 per pound $11.5
ID: 2414832 • Letter: H
Question
Hours or Rate Cost Direct materials Direct labor 4.6 pounds 2.50 per pound $11.50 0.2 hours 18.00 per hour $ 3.60 During the most recent month, the following activity was recorded a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. b. All of the material purchased was used to produce 4,000 units of Zoom. c. 750 hours of direct labor time were recorded at a total labor cost of $14,925 Required 1. Compute the materials price and quantity variances for the month 2. Compute the labor rate and efficiency variances for the month For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) 1. Materials price variance Materials quantity variance 2.Labor rate variance Labor efficiency varianceExplanation / Answer
Actual DATA for
4000
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
20000
$ 2.35
$ 47,000.00
Direct labor
750
$ 19.90
$ 14,925.00
Standard DATA for
4000
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
18400
$ 2.50
$ 46,000.00
Direct labor
800
$ 18.00
$ 14,400.00
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quantity
(
$ 2.50
-
$ 2.35
)
x
20000
3000
Variance
3000
Favorable-F
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
18400
-
20000
)
x
$ 2.50
-4000
Variance
4000
Unfavorable-U
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 18.00
-
$ 19.90
)
x
750
-1425
Variance
1425
Unfavorable-U
Labour Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
800
-
750
)
x
$ 18.00
900
Variance
900
Favorable-F
Answer
Material Price Variance $ 3000 F
Material Quantity Variance $4000 U
Labor Rate Variance $1425 U
Labor Efficiency Variance $ 900 F
F* Favorable
U*Unfavorable
Actual DATA for
4000
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
20000
$ 2.35
$ 47,000.00
Direct labor
750
$ 19.90
$ 14,925.00
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