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ry Bookmarks Window Help ® 055% , Sat 11:21 v2.cengagenow.com Direct Materials and Direct Labor Variance Analysis Abbeville Fisture Company manufactures units in a small manufecturing faoility. The units are made from brass. Manufacturing has 40 employees Each employee presently provides 36 hours of labor per week. Information aboutproduction week is as folows: Standard wage per hour Standard labor time per unit $12 20 Standard number of Ibs. of brass Standard price per lb. of brass 12.25 Actual price per b. of brass Actual lbs. of brass used duning the 12,793 $12.5 lbs. 6,900 12.36 Number of units produced during Actual wage per hour Actual hours for the week (40 1,440 employees × 36 s) Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit Direct labor standard cost per unit Total standard cost per unit b. Determine the direct materials price varlance, direct materials quantity variance, and total direct materiais cost varlance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Unfavorable Unfavorable Direct Materials Quantity Variance Total Direct Materials Cost Variance SLUnfavorable c. Determine the direct labor rate varlance, direct labor time variance, and total direct lobor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Drect Labor Rate Varlance Unfaverable Direct Labor Time Variance Favorae Total Direct Labor Cost Variance Favoralle Check My Work Previous NextExplanation / Answer
[(Standard price x standard quantity per unit x actual units produced) - (Actual quantity x standard price)]
Important note – Please note that wherever the answer is favorable, please use negative sign & wherever unfavorable please use positive.
Standard direct material cost per unit Standard number of lbs. of brass 1.8 lbs. Standard price per lb. of brass $12.25 Standard direct material cost per unit $22.05 Standard direct labor cost per unit Standard wage per hour $12.00 Standard labor time per unit 20 mins Standard direct labor cost per unit $4.00 [ $12 x (20mins/60mins) ] Total standard cost per unit $26.05 Direct material cost variance - Direct material price variance: [(Standard price - actual price) x actual quantity] Standard price $12.25 Actual price $12.50 Actual quantity 12,793 lbs. Direct material price variance -$3,198.25 unfavorable Direct material quantity variance:[(Standard price x standard quantity per unit x actual units produced) - (Actual quantity x standard price)]
Standard price $12.25 Standard quantity per unit 1.8 lbs. Actual units produced 6900 Actual quantity 12,793 lbs. Direct material quantity variance -$4,569.25 unfavorable Total direct material cost variance: -$7,767.50 unfavorable [(Standard quantity x standard price) - (actual quantity x actual price)] [(1.8 lbs. x 6900 x $12.25) - (12,793 lbs. x $12.50) Direct labor cost variance - Direct labor rate variance: [(Standard rate - actual rate) x actual hours] Standard rate per hour $12.00 Actual rate per hour $12.36 Actual hours 1440 Direct labor rate variance -$518.40 unfavorable Direct labor time variance: [(Standard hours for actual production - actual hours) x standard rate] Standard hours for 6900 units [6900 x (20mins/60mins)] 2300 Actual hours 1440 Standard rate $12.00 Direct labor time variance $10,320.00 favorable Total direct labor cost variance $9,801.60 favorable [(Standard hours x standard rate) - (actual hours x actual rate)] [(2300*12)-(1440*12.36)]Important note – Please note that wherever the answer is favorable, please use negative sign & wherever unfavorable please use positive.
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