Faucet Industries Inc. manufactures faucets in a small manufacturing facility. T
ID: 2424530 • Letter: F
Question
Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
Standard wage per hr. $18.00
Standard labor time per faucet 12 min.
Standard number of lbs. of zinc 0.80 lb.
Standard price per lb. of zinc $1.25
Actual price per lb. of zinc $1.40
Actual lbs. of zinc used during the week 10,200
Number of faucets produced during the week 12,000
Actual wage per hr. $18.75
Actual hrs. per week 2,160 hrs.
Instructions:
Determine (a) the standard cost per unit for direct materials and direct labor;
(b) the price variance, quantity variance, and total direct materials cost variance; and
(c) the rate variance, time variance, and total direct labor cost variance.
So I found this answer on Chegg, and changed a term or two in it to match my questions. If one of you would write out what the abbreviations stand for (AQ; AP = actual price, I assume; SP = standard price, I assume; U; etc.), correct any mistakes, and show how to do the parts that I have doubts about (????), I would appreciate it. My school has no tutors for this, and I don’t know what I’m doing. Thank you for your time.
a. Standard direct material cost per faucet = .80 * 1.25 = $1
Standard direct labor cost per faucet = 12 min *18 per hour /60 min = $ 3.60
b. Material price variance = AQ (AP -SP)
= 10200 (1.40 - 1.25)
= 10200 *.15
= 1530 (U)
Quantity variance = SR (AQ -SQ)
= 1.25 [10200 - ( 12000* .80) ]
= 1.25[10200 - 9600]
= 750 U
Total direct materials cost variance = ????
c. Rate variance???? = AH (AR-SR)
= 2160 (18.75 - 18)
= 2160 *.75
= 1620 (U)
Time variance = SR (AH-SH)
= 18 [2160 - (12000 * 12/60) ]
= 18[2160 - 2400]
= 18 * -240
= - 4320 F
Total direct labor cost variance = ????
Explanation / Answer
Answer:1 Standard direct material cost per faucet = .80 * 1.25 = $1
Standard direct labor cost per faucet = 12 min *18 per hour /60 min = $ 3.60
Answer:2
Material price variance = AQ (AP -SP)
= 10200 (1.40 - 1.25)
= 10200 *.15
= 1530 (U)
Quantity variance = SR (AQ -SQ)
= 1.25 [10200 - ( 12000* .80) ]
= 1.25[10200 - 9600]
= 750 U
Total direct materials cost variance=Material Price variance+Quantity variance
=1530 U+750 U
=2280 U
Answer:3 Rate variance???? = AH (AR-SR)
= 2160 (18.75 - 18)
= 2160 *.75
= 1620 (U)
Time variance = SR (AH-SH)
= 18 [2160 - (12000 * 12/60) ]
= 18[2160 - 2400]
= 18 * -240
= - 4320 F
Total direct labor cost variance =Rate variance+time variance
=1620 U+4320 F
=2700 F
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