Question

Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Silver Crystals Direct labor Standard Quantity Standard (Rate) 0.45 oz. $24.00 per oz. 6.00 $ 0.45 per crystal 1.50 hrs. $13.00 per hr. Standard Unit Cost $ 10.80 2.70 19.50 During the month of January, Crystal Charm made 1,540 charms. The company used 663 ounces of silver (total cost of $16,575) and 9,290 crystals (total cost of $3,994.70), and paid for 2,460 actual direct labor hours (cost of $30,750.00). Required: 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. (Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Silver Crystals Direct Material Price Variance Direct Material Quantity Variance 2. Calculate Crystal Charm's direct labor variances for the month of January. (Round your intermediate calculations and final answers to 2 decimal places.Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance

Answer 1

Silver Particulars Direct Material SQ SP AQ AP 69324663 25 Material Price Variance (MPV) = (SP-APAQ >>MPV = ( 24 - 25 ) * 663 >>MPV = -663 Unfavorable Material Quantity Variance (MQV) = ( SQ-AQ) SP >>MQV = ( 693 - 663 ) * 24 >>MQV = 720 Favorable Note-1 SQ = Standard Quantity for Actual output SP = Standard Price per Raw material AQ = Actual Quantiity consumed AP = Actual Price per Raw material

Crystals Particulars Direct Material SQ 9240 SP 0.45 AQ 9 290 AP 0.43 Material Price Variance (MPV) = ( SP-AP) AQ >>MPV = ( 0.45 - 0.43 ) * 9290 >>MPV = 185.80 Favorable Material Quantity Variance (MQV) = (SQ - AQ) SP >>MQV = ( 9240 - 9290 ) * 0.45 >>MQV = -22.50 Unfavorable Note -1 SQ = Standard Quantity for Actual output SP = Standard Price per Raw material AQ = Actual Quantiity consumed AP = Actual Price per Raw material

Particulars Direct Labour SH 2310 SR 13 AHP 2460 AR 12.5 Labour Rate Variance (LV) = ( SR - ARAHP >>LRV = ( 13 - 12.5 ) * 2460 >>LRV = 1230 Favourable 2 2310 . Labour Efficiency Variance ( LEV) = ( SH - AHW) SR = ( 2310 - 2460 ) * >>LEV = -1950 Unfavourable >>LEV - 13 Note-1 SH = Standard Hours per Actual Output SR = Standard Rate per Hour AHP = Actual Hours Paid AR = Actual Rate per Hour.