Best Faucet Company manufactures faucets in a small manufacturing facility. The
ID: 2528359 • Letter: B
Question
Best Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:
Required:
a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Standard wage per hour $13.8 Standard labor time per faucet 15 min. Standard number of lbs. of zinc 2.1 lbs. Standard price per lb. of zinc $9.5 Actual price per lb. of zinc $9.75 Actual lbs. of zinc used during the week 14,900 lbs. Number of faucets produced during the week 6,900 Actual wage per hour $14.2 Actual hours per week 2,400 hrs.Explanation / Answer
Answers
Direct materials standard cost per faucet
[2.1 lbs x $9.5 per lb]
$19.95
Direct labor standard cost per faucet
[15 min x $13.8/60]
$3.45
Total standard cost per faucet
[19.95 + 3.45]
$23.4
Actual data and standard data for 6900 faucets
Actual DATA for
6900
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
14900
$ 9.750
$ 1,45,275.00
Direct labor
2400
$ 14.20
$ 34,080.00
Standard DATA for
6900
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
14490
$ 9.50
$ 1,37,655.00
Direct labor
1725
$ 13.80
$ 23,805.00
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quantity
(
$ 9.50
-
$ 9.75
)
x
14900
-3725
Variance
3725
Unfavourable-U
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
14490
-
14900
)
x
$ 9.50
-3895
Variance
3895
Unfavourable-U
Material Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 1,37,655.00
-
$ 1,45,275.00
)
-7620
Variance
7620
Unfavourable-U
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 13.80
-
$ 14.20
)
x
2400
-960
Variance
960
Unfavourable-U
Labour Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
1725
-
2400
)
x
$ 13.80
-9315
Variance
9315
Unfavourable-U
Labor Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 23,805.00
-
$ 34,080.00
)
-10275
Variance
10275
Unfavourable-U
Direct materials standard cost per faucet
[2.1 lbs x $9.5 per lb]
$19.95
Direct labor standard cost per faucet
[15 min x $13.8/60]
$3.45
Total standard cost per faucet
[19.95 + 3.45]
$23.4
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