Exercise 23-7 Nona Inc., which produces a single product, has prepared the follo
ID: 2570936 • Letter: E
Question
Exercise 23-7 Nona Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $2.00 per pound) Direct labor (3 hours at $11.00 per hour) During the month of April, the company manufactures 190 units and incurs the following actual costs. Direct materials purchased and used (2,400 pounds) Direct labor (590 hours) Compute the total, price, and quantity variances for materials and labor. $16.00 $33.00 $5,496 $6,378 Total materials variance Materials price variance Material Total labor variance Labor price variance Labor quantity variance Click if you would like to Show Work for this question: Is quantity variance Open Show WorkExplanation / Answer
Total Material Variance :Actual cost- standard cost
= 5496 - [190*16]
= 5496 - 3040
= 2456 U
Material price variance =Actual cost - [AQ*SR]
= 5496-[2400*2]
= 5496- 4800
= 696 U
Material qunatity variance =SR [AQ-SQ]
= 2[2400-(8*190)]
= 2[2400- 1520]
= 1760U
Total labor variance =Actual cost- standard cost
= 6378-[190*33]
= 6378- 6270
= 108 U
Labor rate variance =Actual cost -[AH*SR]
= 6378-[590*11]
= 6378 -6490
= -112 F
Labor efficiency variance =SR[AH-SH]
= 11[590-(190*3)]
= 11[590 - 570]
= 220 U
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