Question

Required information [The following information applies to the questions displayed below.) A manufactured product has the following information for June Direct materials Direct labor Overhead Units manufactured Standard 5 lbs. @ $8 per lb. 3 hrs. @ $17 per hr. 3 hrs. @ $13 per hr. Actual 42,100 lbs. @ $8.20 per lb. 24,500 hrs. @ $17.50 per hr. $329,000 8,300 Compute the direct materials price variance and the direct materials quantity variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Cost per unit" answers to 2 decimal places.) AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost AQT X Standard Cost SQL X AP AQ X SP SP 8,300 A 142 100.00 | $ 336,800 $ 0 IS 0 S Direct materials price variance Direct materials quantity variance Direct labor rate variance O Unfavorable OfUnfavorable 8,420 Unfavorable $

Answer 1

-Answers 40 x AP AQ X SP 42,100 x 58 so y SP ce 200x 5) y $8 42100 * $ 8.20 $332000 = $336,800 = $345,220 brrect materia price variance = Aal sp-np) = fax sp) - CAQ XAP) = $336,800 - $ 345,220 = $8420 (unfavocorable) (2) Direct materia Quantity variance = (SP x s@)-(SPXAQ) $ 332000 - $336,800 = - $480 (unfavourable) B Direct labour rate variance - PDI AH (SR-AR) = 24500 ($17 - $1750) > 24500 x (-0.5D) = 12250 (un Favourable)