During March, Manhattan Fabrics Corporation manufactured 530 units of a special

Question

During March, Manhattan Fabrics Corporation manufactured 530 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March.

The standard prime costs for one unit of Stylex are as follows:

Compute the following variances for the month of March. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).

Direct material purchased: 18,300 yards at $1.41 per yard 25803 Direct material used: 9,800 yards at $1.41 per yard 13818 Direct labor: 2,400 hours at $9.18 per hour 22032

Explanation / Answer

Ans) Manhattan Fabric. Corporation Cost Actual Labor rate $                        9.18 Per hour Actual Material Price $                        1.41 Per Yard Standard Labor rate $                        9.00 Per hour Standard material Price $                        1.38 Per Yard Quantity Actual Hours used 2400 Hours Actual quantity of material used 9800 Yards Actual Quantity of material Purchased 18300 Yards Standard Hours used 2120 Hours Standard Quantity of material used 10600 Tons Direct Material Price Variance AQ(AP-SP) 9800*($1.41-$1.38) $                   294.00 (U) Direct Material Quantity Variance SP(AQ-SQ) $1.38(9800-10600) -1104 (F) Direct Material Purchase Price Varince Actual Quantity Purchased(AP-SP) 18300($1.41-$1.38) $                   549.00 (U) Direct Labor Rate Variance AH(AR-SR) 2400($9.18-$9) $                   432.00 (U) Direct Labor Efficiency Variance SR(AH-SH) $9(2400-2120) $               2,520.00 (U)

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