Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass. Manufacturing has 30 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:
Standard wage per hour | $10.8 |
Standard labor time per unit | 10 min. |
Standard number of lbs. of brass | 1.8 lbs. |
Standard price per lb. of brass | $12.75 |
Actual price per lb. of brass | $13 |
Actual lbs. of brass used during the week | 15,574 lbs. |
Number of units produced during the week | 8,400 |
Actual wage per hour | $11.12 |
Actual hours for the week (30 employees × 40 hours) | 1,200 hrs. |
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 = 1.8*12.75 = $22.95 per unit
Direct labor standard cost per unit = 10/60*10.80 = $1.8 per unit
Total standard cost per unit= 22.95 + 1.80 = $24.75 per unit
b. Materials price variance = (Standard price - actual price) x
Material purchased
= {$12.75 - $13} x 15574= $3894 Unfavorable
Materials quantity variance = (Standard quantity - actual
quantity used) x standard price
= {(8400*1.8) - 15574} x $12.75 = $5789 Unfavorable
Total Direct Materials Cost Variance = 8400*22.95 - 15574*13 = $9682 Unfavorable
c. Labor rate variance = (Standard rate - actual rate) x Actual
hours used
= {$10.8 - $11.12} x 1200 = $384 Unfavorable
Labor efficiency variance = (Standard hours - actual hours) x
Standard rate
= {(8400*10/60) - 1200} x $10.80 = $2160 Favorable
Total Direct Labor Cost Variance =8400*1.80 - 1200*11.12 = $1776 Favorable
Abbeville Fixture Company manufactures units in a small manufacturing facility. The units are made from brass....
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