2.5 hours $22.50 During the past month, the company purchased 6,000 pounds of di
ID: 2456253 • Letter: 2
Question
2.5 hours
$22.50
During the past month, the company purchased 6,000 pounds of direct materials at a cost of $16,500.
All of this material was used in the production of 1,400 units of product. Direct labor cost totaled $28,500 for the month. The following variances have been computed:
Materials quantity variance $1,200 U
Total materials spending variance $300 F
Labor efficiency variance $4,500 F
1.For direct materials:
a) compute the standard price per pound for materials
b) compute the standard quantity allowed for materials for the month's production
C) Compute the standard quantity of materials allowed per unit of product.
2. For direct labor:
a) compute the actural direct labor cost per hour for the month
b) Compute the labor rate variance
Please give me specific calculations in order to get each question.
Direct Materials Direct Labor Standard quantity or hours per unit ? pounds2.5 hours
Standard price or rate ? per pound $9 per hour Standard cost per unit ?$22.50
Explanation / Answer
Direct Material Usage Variance:
(Actual Quantity - Standard Quantity) x Standard Price
Direct Labor Effciency Variance:
Actual Hours x Standard Rate - Standard Hours x Standard Rate
Standard Cost of Actual Hours - Standard Cost
Direct Labor Rate Variance:
Actual Cost - Standard Cost of Actual Hours
Actual Quantity x Actual Rate - Actual Quantity x Standard Rate
Direct Material quantity variance= (Actual usage in units - Standard usage in units) x Standard cost per unit Stnd cost per pound 2.75 (16500/6000) Stnd pounds per unit 4.3 6000/1400 Std cost per unit 11.8 1200 (6000-std quantity)*11.8 102 Std qty = 6000-102 = 5898Direct Material Usage Variance:
(Actual Quantity - Standard Quantity) x Standard Price
300 102 2.941176471Direct Labor Effciency Variance:
Actual Hours x Standard Rate - Standard Hours x Standard Rate
Standard Cost of Actual Hours - Standard Cost
4500 Actual hrs*9-2.5*9 22.5 4522.5 Actual hrs*9 502.5 Actual hrs actual direct labor cost per hour Actual cost 31500 Actual hours 502.5 Std rate 22.5 11306.25Direct Labor Rate Variance:
Actual Cost - Standard Cost of Actual Hours
Actual Quantity x Actual Rate - Actual Quantity x Standard Rate
28500-(502.5*22.5)Related Questions
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