Question

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Required information The following information applies to the questions displayed below A manufactured product has the following information for June. Actual 45, 400 lbs. $8.20 per lb Standard Direct materials Direct labor Overhead Units manufactured (5 1bs. $8 per 1b.) (3 hrs. $15 per hr.) 26,700 hrs. e $15.50 per hr. (3 hrs. e $12 per hr.) $330, 100 9,000 (1) Compute the standard cost per unit. Direct materials Direct labor Overhead Total (2) Compute the total cost variance for June. Indicate whether the cost variance is favorable or unfavorable. Total cost variance

Answer 1

Calculate standard cost per unit

Direct material (5*8)	40
Direct labor (3*15)	45
Overhead (3*12)	36
Total	121

b) Calculate total Cost variance

Standard cost = 121*9000 = $1089000

Actual Cost = 1116230

Total Cost variance = 1116230-1089000 = $27230 Unfavorable

c) Direct material variance

Actual Cost								Standard Cost
AQ	AP	AQ*AP		AQ	SP	AQ*SP		SQ	SP	SQ*SP
45400	8.20	372280		45400	8	363200		45000	8	360000
			9080				3200
Material price variance				9080	Unfavorable
Material quantity variance				3200	Unfavorable
Total material variance				12280	Unfavorable