DC Company has set the following standards in order to produce one unit of product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, DC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, DC Company used 16,000 yards of direct materials in the production of units. DC had 2,500 yards of materials in its August 1 direct material inventory and had 1,200 yards yards remaining in its direct materials inventory at August 31. DC Company reported the following variances for August: Direct material price variance .............. $12,495 unfavorable Direct labor rate variance .................. $24,240 unfavorable Total direct labor variance ................. $6,560 favorable Variable overhead spending variance ......... $1,900 unfavorable Variable overhead efficiency variance ....... $20,900 favorable Calculate the number of units produced by DC Company in August.
Please Explain
Actual direct labor costs | $ 189,440 | |
Add: | Total direct labor variance | $ 6,560 |
Standard direct labor costs | $ 196,000 | |
Divided by: | Standard labor rate | $ 14 |
Standard direct labor hours | 14,000 | |
Divided by: | Standard direct labor hours per unit | 2 |
Actual units produced by DC Company in August | 7,000 |
Proof of answer
Actual direct labor costs | $ 189,440 | |
Less: | Direct labor rate variance | $ 24,240 |
Standard costs of actual hours | $ 165,200 | |
Divided by: | Standard labor rate | $ 14 |
Actaul labor hours | 11,800 |
minus sign indicate unfavorable variance. | ||
Measure | Hour | |
Standard price per Hour | $ 14.00 | |
189440/11800 | Actual price per Hour | $ 16.05 |
7000*2 | Standard labor Hours | 14,000 |
Actual labor Hours | 11,800 | |
Standard price per Hour | 14.00 | |
Less | Actual price per Hour | -16.05 |
Difference | -2.05 | |
Multiply | Actual labor Hours | 11800 |
Labor price (rate) variance | $ (24,240) | |
Indicate | Unfavorable | |
Standard labor Hours | 14000 | |
Less | Actual labor Hours | -11800 |
Difference | 2200 | |
Multiply | Standard price per Hour | 14.00 |
Labor quantity (efficiency) variance | $ 30,800 | |
Indicate | Favorable | |
Total direct labor variance (Total of both variance) | $ 6,560 | |
Indicate | Favorable |
DC Company has set the following standards in order to produce one unit of product: standard...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
Jones Company has the following standards for its single product: standard quantity standard price direct materials 11 pounds per unit $4.25 per pound direct labor 8 hours per unit $14.00 per hour variable overhead 8 hours per unit ?????? per hour Jones Company reported the following information for the month of October: 1. 9,140 units were produced. 2. The direct material quantity variance was $36,295 favorable. 3. The variable overhead spending variance was $1,520 favorable. 4. The total direct labor...
The standard cost sheet for Chambers Company, which manufactures
one product, follows:
Direct materials, 40 yards at $3.00 per yard
$
120
Direct labor, 5 hours at $30 per hour
150
Factory overhead applied at 70% of direct labor
(variable costs = $70; fixed costs = $35)
105
Variable selling and administrative
74
Fixed selling and administrative
50
Total unit costs
$
499
Standards have been computed based on a master budget activity
level of 29,800 direct labor-hours...