Direct Materials and Direct Labor Variance Analysis
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
Standard wage per hour | $12.60 |
Standard labor time per unit | 20 min. |
Standard number of lbs. of brass | 2.1 lbs. |
Standard price per lb. of brass | $10.75 |
Actual price per lb. of brass | $11.00 |
Actual lbs. of brass used during the week | 14,925 lbs. |
Number of units produced during the week | 6,900 |
Actual wage per hour | $12.98 |
Actual hours for the week (40 employees × 36 hours) | 1,440 |
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
Direct materials standard cost per unit | $ |
Direct labor standard cost per unit | $ |
Total standard cost per unit | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct Materials Price Variance | $ | |
Direct Materials Quantity Variance | $ | |
Total Direct Materials Cost Variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct Labor Rate Variance | $ | |
Direct Labor Time Variance | $ | |
Total Direct Labor Cost Variance | $ |
a. Direct materials standard cost per unit = 2.1*10.75 = $22.5575
Direct labor standard cost per unit = 20/60*12.60 = $4.20
Total standard cost per unit = $22.575 + 4.20 = $26.775
b. Direct Materials Price Variance = (10.75-11)*14925 = $3731.25 Unfavorable
Direct Materials Quantity Variance = (6900*2.1 - 14925)*10.75 = $4676.25 Unfavorable
Total Direct Materials Cost Variance = 6900*22.575 - 14925*11 = $8407.5 Unfavorable
c. Direct Labor Rate Variance = (12.60 - 12.98)*1440 = $547.20 unfavorable
Direct Labor Time Variance = (6900*20/60 - 1440)*12.60 = $10,836 Favorable
Total Direct Labor Cost Variance = 6900*4.20 - 12.98*1440 = $10288.80 Favorable
Direct Materials and Direct Labor Variance Analysis Shasta Fixture Company manufactures faucets in a small manufacturing...
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Direct Materials and Direct Labor Variance Analysis Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Standard wage per hour $16.20 Standard labor time per unit 20 min. Standard number of lbs. of brass 2.1 lbs. Standard price per lb. of brass $12.00 Actual price per lb. of brass $12.25 Actual...
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