) $5.25 Animent Industries, Inc. (AII), developed standard costs for direct mate

Question

) $5.25 Animent Industries, Inc. (AII), developed standard costs for direct material and direct labor in 2015. All estimated the following standard costs for one of their major products, the 10-gallon plastic container Budgeted quantity 0.10 pounds 0.05 hours Budgeted price $60 per pound $30 per hour Direct materials Direct labor During June, All produced and sold 20,000 containers using 1,900 pounds of direct materials at an average cost per pound of $64 and 1,000 direct manufacturing labor-hours at an average wage of $30.50 per hour. 16) The direct material price variance during June is A) $7,600 unfavorable B) $1,600 favorable C) $1,600 unfavorable D) $500 favorable 17) The direct manufacturing labor price variance during June is A) $500 unfavorable B) $500 favorable C) $7,600 unfavorable D) 1,600 unfavorable 18) Effective planning of fixed overhead costs includes A) planning day-to-day operational decisions B) eliminating value-added costs C) determining which products are to be produced D) choosing the appropriate level of capacity

Explanation / Answer

Question No. 16 Direct Material price Variance (Standard Price - Actual Price) X Actual Quantity Consumed = [60 - 64] X 1900 pounds = 7,600 Unfavourable A) $7,600 Unfavourable Question No. 17 Direct manufacturing Labour price Variance (Standard rate - Actual rate) X Actual Hours = [30 - 30.50] X 1,000 hours = 500 Unfavourable A) $500 Unfavourable Question No. 18 D) Choosing the appropriate level of capacity

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