A manufactured product has the following information for June. Standard Actual D

Question

A manufactured product has the following information for June. Standard Actual Direct materials (6 lbs.@$9 per lb.) 43,800 lbs.@ $9.10 per Ib Direct labor Overhead Units manufactured (3 hrs.@ $16 per hr.) 21,300 hrs.$16.40 per hr. (3 hrs.@ $11 per hr.) $243,200 7,200 Compute the direct materials price variance and the direct materials quantity varilance. Indicate whother each variance is favorable or unfavorable. Standard Cost Actual Cost AQ AP AQ SP 43,800 X 0.10 $ 4,380 Direct materials price variance

Explanation / Answer

Standard For Actual Output Quantity rate Amount Direct Material 6 9 54 Direct Labour 3 16 48 Overhead 3 11 33 Actual Output Quantity rate Amount Direct Material 6.08 9.1 55.33 Direct Labour 2.96 16.4 48.54 Overhead 2.96 11.41 33.77 Material Price Variance =( Standard Rate - Actual Rate ) Actual Quantity ( 9 - 9.10) * 6.08 = 0.608 Adverse Material Quantity Variance =( Standard Quantity - Actual Quantity ) * Standard Rate ( 6 - 6.08 ) * 9.00 = 0.72 Adverse

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