Question

Hutto Corp, has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (15 lbs. $5 per lb.) Direct labor (3 hrs. $14 per hr.) During May the company incurred the following actual costs to produce 8,900 units. Direct materials (136,200 lbs. $4.80 per lb.) Direct labor (29,900 hrs. $14.10 per hr.). $653,760 421,590 AQ - Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price AH-Actual Hours SH = Standard Hours AR - Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance Indicate whether each variance is favorable or unfavorable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances and classify it as favorable or unfavorable. Actual Cost Standard Cost $ 0 Favorable Direct materials price variance Direct materials price variance Total direct materiais variance o unfavorable |< Prev 2 of 5 Next >

Answer 1

Answer: - materi Vollances standard cost - Actual cost AQ (XI AP AO X 136200 x SP $5 so X (8900x15) * SP $5 136200 X $4.80 - $ 667,500 - $681,000 - $653,760 Peppa (AQxAp) - (AQX SP) materia price variance : $ $27,240 (Farownede.) ilal Quantity canrance - AQ XSP) - (sex sp). C = $681,000 - $ 667500 = $13500 Cunfavourable). variance = AQXAP)_ (sQxsp) Tolal direct materia = $653,760 - $667,500 2 $13740 (Favoura ble )

(2) labour variances standard cost Actual cost AH X AR AH X SR SH X SR (8900x3) * $ 1400 = $373,800 29,900 x $14 29900 x $14.10 = $418,600 = $421,590 is direct labour rate voorrance = AH XAR) - ( AH XSR) : -. $2990 Confavourable). cite orrect labour Efficiency variance = (14x SR) – (SHXSR) = $418,600 – $373,800 $ 44,800 (unfavourable) Third Total Direct labour varicence = AHX hk) - (Sax.se) = $421,590 - $313,800 = $47,790 (unfavourable)