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. $4 per lb.) Direct labor (2 hrs. $15 per hr.) During May the company incurred the following actual costs to produce 8,300 units. Direct materials (128, 400 lbs. $3.50 per lb.) Direct labor (21,100 hrs. @ $15.10 per hr.). $487.920 318.610 AH - Actual Hours SH - Standard Hours AR = Actual Rate SR = Standard Rate AQ - Actual Quantity SQ Standard Quantity AP Actual Price SP - Standard Price

Answer 1

Answer:- Direct Material price variance= $25680 F.

Direct Material Quantity variance = $15600 U.

Explanation-

1)-Material price variance = (Standard price – Actual price) * Actual quantity used

                                     = ($4.00 per lb. - $3.80 per lb.)*128400 lbs.   

                                       = $25680 Favorable

2)-Material Quantity variance = (Standard Quantity- Actual Quantity)*Standard price

                                              =(124500 lbs. – 128400 lbs.)*$4.00 per lb.

                                             = $15600 Unfavorable

Where:-

Standard Quantity = No. of lb. per unit*Actual output

                               =15 lbs. per unit *8300 units =124500 lbs