1. The standard materials cost to produce 1 unit of Product R is 6 pounds of mat

Question

1. The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials quantity variance? 2. The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the direct materials price variance? 3. A job was budgeted to require 3 hours of labor per unit at $8.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000. What is the direct labor efficiency variance?

Explanation / Answer

1) Driect materials Quantity variance (actual qty - standard qty allowed)*Standard rate (47000 - 8000*6)*50 50000 F 2) Direct materials price variance (Actual price - standard price)*AQ purchased (51-50)*47000 47000 U 3) Direct labor Efficiency variance (Actual hrs - standard hrs allowed)*standard rate (22000 - 8000*3)*8 16000 F

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