Adamantane Inc. processes a base chemical into plastic. Standard costs and actua

Question

Adamantane Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 15,000 units of product were as follows: Each unit requires 0.2 hour of direct labor. Instructions Determine (a) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; (b) the direct labor rate variance, direct labor time variance, and total direct labor cost variance; and (c) the variable factory overhead controls variance, fixed factory overhead volume variance, and total factory overhead cost variance.

Explanation / Answer

ADAMANTANE INC. Production 15000 Units Standard Cost Actual cost Direct Material 5000 lbs.at $50 4950 lbs at $50.60 Direct Labour 3000 hrs at $25 2945 hrs at $25.60 Factory Overhead Direct Labour hour 3200 Variable cost $5.50 $16,680 Fixed Cost $4 $12,800 Each unit requires 0.2 hours of direct labour (a) Direct material price variance Actual Material used( Standard Price-Actual Price) Direct material price variance $         (2,970.00) (U) Direct material Quantity variance (Standard Quantity-Actual Quantity)standard Price $           2,500.00 (F) Total material cost Variance= Direct material Price variance+ Direct material Quantity variance $            (470.00) (U) (b) Direct labour rate variance= Actual hours(Standard rate-Actual Rate) $         (1,767.00) (U) Direct Labour efficiency variance= (Standard Hours-Actual Hours)*Standard Rate $           1,375.00 (F) Total direct labour cost variance= Direct labour rate variance+ Direct labour efficiency variance $            (392.00) (U) (c ) The variable overhead controllable variance Budgeted Variable Overhead $         16,500.00 Actual Variable Overhead $         16,680.00 $            (180.00) (U) Fixed Factory overhead volume variance Budgeted Fixed Overhead 12000 Actual Fixed Overhead 12800 $            (800.00) (U) Total Factory overhead cost variance $            (980.00) (U)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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