2. (8 points)Ravena Labs., Inc. makes a single product which has the following s

Question

2. (8 points)Ravena Labs., Inc. makes a single product which has the following standards: Direct materials 2.5 ounces at $18 per ounce Direct labor 1.4 hours at $11.50 per hour • 3,750 units of compound were produced during the month. • There was no beginning direct materials inventory. • The ending direct materials inventory was 2,000 ounces. • Direct materials purchased: 12,000 ounces for $225,000. • Direct labor hours worked: 5,600 hours at a cost of $67,200.

A.The direct materials price variance for October is:

B.The direct materials quantity variance for October is:

C. The direct labor rate variance for October is:

D. The direct labor efficiency variance for October is:

Explanation / Answer

A.The direct materials price variance for October is:(standard price-actual price)Actual quantity

=(18*12000-225000) = 9000 Unfavourable

B.The direct materials quantity variance for October is:(Standard quantity-actual quantity)Standard price

=(3750*2.5-10000)*18 = 11250 Unfavourable

C. The direct labor rate variance for October is:(standard rate-actual rate)Actual hours

=(11.50*5600-67200) = 2800 Unfavourable

D. The direct labor efficiency variance for October is:(Standard Hours-actual hours)Standard rate

=(3750*1.4-5600)*11.50 = 4025 Unfavourable

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