During May, Joliet Fabrics Corporation manufactured 640 units of a special multi

Question

During May, Joliet Fabrics Corporation manufactured 640 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May.

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

Required:

Compute the following variances for the month of May. (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: 19,400 yards at $1.52 per yard $ 29,488 Direct material used: 10,900 yards at $1.52 per yard 16,568 Direct labor: 3,500 hours at $9.29 per hour 32,515

Explanation / Answer

Compute the following variances for the month of May.

  

1. Direct-material price variance (1.49-1.52)*10900 327 U 2. Direct-material quantity variance (640*20-10900)1.49 2831 F 3. Direct-material purchase price variance (1.49-1.52)*19400 582 U 4. Direct-labor rate variance (7-9.29)*3500 8015 U 5. Direct-labor efficiency variance (640*5-3500)*7 2100 U

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