ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in its August 1 direct material inventory and had 1,200 yards yards remaining in its direct materials inventory at August 31. ABC Company reported the following variances for August: Direct material price variance .............. $12,495 unfavorable Direct labor rate variance .................. $24,240 unfavorable Total direct labor variance ................. $6,560 favorable Variable overhead spending variance ......... $1,900 unfavorable Variable overhead efficiency variance ....... $20,900 favorable Calculate ABC's direct material quantity variance for August. If the variance is favorable, place a minus sign in front of your answer (i.e., -5000). If the variance is unfavorable, simply enter your answer as a number (i.e., 5000).
Total direct labor variance = $6,560 Favorable
Actual direct labor cost = $189,440
Standard direct labor cost = Actual direct labor cost +Favorable direct labor variance
= $189,440 + $6,560 = $196,000
Standard labor cost per unit = 2*$14 = $28 per unit
Nos of units produced by ABC company in august = Standard direct labor cost / Standard labor cost per unit = $196,000 / $28 = 7000 units
Material quantity purchased = 16000+1200-2500 = 14700 yards
Materials price variance = (Standard price - actual price) x Material purchased
- 12495 = (Standard Price per yard - 133770/14700)*14700
Standard Price per yard = $8.25 per unit
Materials quantity variance = (Standard quantity - actual
quantity used) x standard price
= (7000*2.7 - 16000)*8.25
= $23,925 Favorable
ABC Company has set the following standards in order to produce one unit of its single...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
ABC Company has set the following standards in order to produce one unit of its single product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, ABC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, ABC Company used 16,000 yards of direct materials in the production of units. ABC had 2,500 yards of materials in...
DC Company has set the following standards in order to produce one unit of product: standard quantity standard price direct materials 2.7 yards ?? per yard direct labor 2 hours $14 per hour variable overhead 2 hours ?? per hour During August, DC Company spent $133,770 to purchase direct materials and had direct labor totaling $189,440. During August, DC Company used 16,000 yards of direct materials in the production of units. DC had 2,500 yards of materials in its August...
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