Hutto Corp. has set the following standard direct materials and direct labor cos

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.$4 per lb.) Direct labor (3 hrs. $15 per hr.) $60 45 During May the company incurred the following actual costs to produce 9,000 units Direct materials (138,000 lbs.@$3.75 per 1b.) Direct labor (31,e80 hrs.@ $15.10 per hr.). 517, 5ee 468,180 AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price AH- Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate

Explanation / Answer

a) Direct material variance :

b) Direct labour variance :

Actual cost Standard cost AQ AP AQ*AP AQ SP AQ*SP SQ SP SQ*SP 138000 3.75 517500 138000 4 552000 135000 4 540000 34500 12000 Material price variance 34500 Favorable Material quantity variance 12000 Unfavorable Total material variance 22500 Favorable

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