Question

10 The following describes production activities of Mercer Manufacturing for the year 071 points Actual direct materials used ||| 36,000 lbs. at $6.05 per 10 Actual direct labor used 11,100 hours for a total of 233, 100 Actual units produced Budgeted standards for each unit produced are 0.50 pound of direct material at $6.00 per pound and 10 minutes of direct lobor at $22.00 per hour AH - Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate AQ Actual Quantity So Standard Quantity AP Actual Price SP Standard Price (1) Compute the rect materials pncond quantity variances and classy each as favorable of unfavorable indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit answers to 2 decimal places.) (2) Compute the direct labor rate and efficiency variances and classity each as favorable or unfavorable (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below.

Answer 1

SP Actual cost AQ 36.000 $217,800 AP $6.05 AQ 36,000 Standard cost SQ 33.015 $198.090 SP $6.00 $6.00 $216,000 $1,800 $17,910 Direct materials rate variance Direct materials quantity variance Total Direct material varinace $1.800 Unfavorable $17,910 Unfavorable $19,710 Unfavorable Workings: Standard Quantity 66.030 units * 0.50 pound per unit = 33,015 pounds AH Actual cost X 11.100 $233.100 AR $21.00 AH 11,100 X X $244,200 SR $22.00 Standard cost SH X SR 11.005 X $22.00 $242,110 $11,100 $2.090 Direct labor rate variance Direct labor efficiency variance Total Direct labor varinace $11,100 Favorable $2.090 Unfavorable $9,010 Favorable Workings: Actual hours Standard hours Actual Rate Standard Rate 66.030 units * 1/6 hours per unit = $233,100 / 11.100 hrs = 11.100 hrs 11,005 hrs $21.00 per hr $22.00 per hr