Question

Problem 23-2A (Part Level Submission) Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017 CALCULATOR PRINTER VERSION Standard Costs and Production Data Raw materials unit cost Raw materials units used Direct labor payroll Direct labor hours worked Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per machine hour Fixed overhead rate per machine hour Actual $2.20 11,200 $175,820 14,900 $202,750 $2.00 10,300 $169,830 15,300 $206,550 43,500 $65,250 $3.00 $1.50 Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $489,000. Sell and administrative expenses were $35,800. Assume that the amount of raw materials purchased equaled the amount used

Answer 1

(a)
(1)
Total materials variance = ( Actual quantity * Actual rate ) - ( Standard quantity * Standard rate ) = ( 11200 * 2.20 ) - ( 10300 * 2.00 )	4040	Unfavorable
Materials price variance = ( Actual price - Standard price ) * Actual quantity = ( 2.20 - 2.00 ) * 11200	2240	Unfavorable
Materials quantity variance = ( Actual quantity - Standard quantity ) * Standard rate = ( 11200 - 10300 ) * 2.00	1800	Unfavorable

(2)
	Actual	Standard
Direct labor payroll	175820	169830
(/) Direct labor hours worked	14900	15300
Direct labor price	11.80	11.10

Total labor variance = ( Actual hours * Actual rate ) - ( Standard hours * Standard rate ) = ( 14900 * 11.80 ) - ( 15300 * 11.10 )	5990	Unfavorable
Labor price variance = ( Actual price - Standard price ) * Actual hours = ( 11.80 - 11.10 ) * 14900	10430	Unfavorable
Labor quantity variance = ( Actual hours - Standard hours ) * Standard price = ( 14900 - 15300 ) * 11.10	4440	Favorable