Direct Materials and Direct Labor Variance Analysis
Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows:
Standard wage per hr. | $10.80 |
Standard labor time per faucet | 10 min. |
Standard number of lb. of brass | 1.60 lb. |
Standard price per lb. of brass | $9.25 |
Actual price per lb. of brass | $9.50 |
Actual lb. of brass used during the week | 10,400 lb. |
Number of faucets produced during the week | 6,300 |
Actual wage per hr. | $11.10 |
Actual hrs. per week | 1,400 hrs. |
Required:
a. Determine the standard cost per faucet 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 variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct materials price variance | $ | favorable/unfavorable |
Direct materials quantity variance | favorable/unfavorable | |
Total direct materials cost variance | $ | favorable/unfavorable |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct labor rate variance | $ | favorable/unfavorable |
Direct labor time variance | favorable/unfavorable | |
Total direct labor cost variance | $ | favorable/unfavorable |
a | |||
Direct materials standard cost per unit | 14.80 | =1.6*9.25 | |
Direct labor standard cost per unit | 1.80 | =10.8*(10/60) | |
Total standard cost per unit | 16.60 | ||
b | |||
Direct materials price variance | 2600 | Unfavorable | =10400*(9.5-9.25) |
Direct materials quantity variance | 2960 | Unfavorable | =9.25*(10400-6300*1.6) |
Total direct materials cost variance | 5560 | Unfavorable | =(10400*9.5)-(6300*9.25*1.6) |
c | |||
Direct labor rate variance | 420 | Unfavorable | =1400*(11.1-10.8) |
Direct labor time variance | 3780 | Unfavorable | =10.8*(1400-6300*10/60) |
Total direct labor cost variance | 4200 | Unfavorable | =(1400*11.1)-(6300*10.8*10/60) |
Direct Materials and Direct Labor Variance Analysis Abbeville Company manufactures faucets in a small manufacturing facility....
Direct Materials and Direct Labor Variance Analysis Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 60 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows Standard wage per hr $13.80 Standard labor time per faucet 15 min. Standard number of lb. of brass 1.80 lb. Standard price per lb. of brass $9.25 Actual price per lb. of brass $9.50 15,600 lb...
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Direct Materials and Direct Labor Variance Analysis Abbeville Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows: Standard wage per hour $13.20 Standard labor time per faucet 10 min. Standard number of lbs. of brass 1.2 lbs. Standard price per lb. of brass $11.75 Actual price per lb. of brass $12.00 Actual...
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