Hutto Corp. has set the following standard direct materials and direct labor cos
ID: 2436704 • Letter: H
Question
Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures Direct materials (15 lbs. $5 per 1b.) Direct labor (4 hrs. $15 per hr. ) $75 60 During May the company incurred the following actual costs to produce 8,600 units Direct materials (131,800 bs $4.80 per lb.) $632,640 576,820 Direct labor (38,200 hrs. $15.10 per hr. AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price AH- Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity varlances. (2) Compute the direct labor rate variance and the direct labor effciency variance. Indicate whether each variance is favorable or unfavorable. Complete this question by entering your answers in the tabs below Required 1 Required 2 Compute the direct materials price and quantity variances and classify it as favorable or unfavorable Standard Cost Requ Required 2>Explanation / Answer
1 Actual rate 4.8 per lbs Direct material price variance = (Standard rate - Actual rate) * Actual quantity Direct material price variance = (5-4.8) * 131800 Direct material price variance = 26360 Favorable 2 Standard Material for actual production 15*8600 1,29,000 lbs Direct material quantity variance= ( Actual material - Standard material for acual production) *Standard rate Direct material quantity variance= (131800-129000)* 5 14000 UnFavorable 3 Actual rate 15.10 per hour Labor rate variance = (Actual rate -Standard rate) * Actual hours Labor rate variance = (15.10-15) * 38200 3820 unFavorable 4 Standard labor hours for actual production 8600*4 34,400 Hours Labor Effeciency variance= (Actual hours - Standard hours for acual production) *Standard rate Labor Effeciency variance= (38200 -34400)* 15 57000 unFavorable
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