Shade Company adopted a standard cost system several years ago. The standard cos

Question

Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (4.40 kilograms × $10.00/kilogram) = $44.00/unit. Direct labor (3.10 hours × $17.00 per hour) = $52.70/unit. All materials were issued at the beginning of processing. The operating data shown below were taken from the records for December: In-process beginning inventory None In-process ending inventory - 70.00% complete as to labor 860 units Units completed during he period 6,040 units Budgeted output 6,500 Purchases of materials (in kilograms) 36,000 Total actual direct labor cost incurred $478,436 Direct labor hours worked (AQ) 23,900 hours Materials purchase-price variance $1,480 favorable Increase in materials inventory in December 1,372 kilograms The direct materials usage variance for December is: $42,680 unfavorable $1,480 favorable $1,424 favorable $1,424 unfavorable $42,680 favorable Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (4.40 kilograms × $10.00/kilogram) = $44.00/unit. Direct labor (3.10 hours × $17.00 per hour) = $52.70/unit. All materials were issued at the beginning of processing. The operating data shown below were taken from the records for December: In-process beginning inventory None In-process ending inventory - 70.00% complete as to labor 860 units Units completed during he period 6,040 units Budgeted output 6,500 Purchases of materials (in kilograms) 36,000 Total actual direct labor cost incurred $478,436 Direct labor hours worked (AQ) 23,900 hours Materials purchase-price variance $1,480 favorable Increase in materials inventory in December 1,372 kilograms The direct materials usage variance for December is: $42,680 unfavorable $1,480 favorable $1,424 favorable $1,424 unfavorable $42,680 favorable

Explanation / Answer

Actual materials used = purchased - increase in inventory

                                     = 36,000 - 1372     = 34,628

Material usage variance = ( Std qty for actual production - actual materials used) std rate

                                        = ( 4.4 * 6900 - 34,628)10

                                       = 42,680 (U)

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.