Question

BAL RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb. ............ Plastic-1.0 lb @ $.38 per lb............. Production labor - 3 hr @ $8.00 per hr .............. Factory overhead ............ Total....................... $ 08 38 2.40 84 $3.70 During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb.......... Plastic-Regular grade-6,000 lb @ $.38 per lb .............. Low grade-3,500 lb @ $.38 per lb ............ Production labor-2,700 hr @ $8.60 per hr ..... Factory overhead ............ Costs charged to production............ $ 760 2,280 1,330 23,220 7.140 $34,730

calculating price and usage variances for each type of material and for labor.

I am stuck on a portion of this. looking for an example or similar

Answer 1

Answer:

Direct Material Price Variance
Item	Actual quantity	× (	Actual price	-	Standard price	) =	DM Price variance
Aluminum	1800	× (	0.48	-	0.40	) =	144	U
Plastic-regular	3000	× (	0.50	-	0.38	) =	360	U
Plastic-low	6000	× (	0.29	-	0.38	) =	540	F
Total							36	F
Direct Material Quantity Variance
Item	Standard price	× (	Actual quantity	-	Standard quantity	) =	DM quantity variance
Aluminum	0.40	× (	1900	-	1700	) =	80	U
Plastic	0.38	× (	9500		8500	) =	380	U
Total							460	U
	Direct Labor Rate Variance
	Actual hours	× (	Actual rate	-	Standard rate	) =	DL Rate variance
	2700	× (	8.60	-	8.00	) =	1620	U
	Direct Labor efficiency Variance
	Standard rate	× (	Actual hours	-	Standard hours	) =	DL Efficiency variance
	8.00	× (	2700	-	2550	) =	1200	U