Question

6. In producing 12,400 units of product last period, Fern LTD. used 53,940 pounds of B, costing $210,366. The company has established the standard of using 4.5 po Material B per unit of product, at a price of $4.00 per pound. Calculate the price, quantity, and total materials variances and indicate if they are favorable or unfavorable. Variance amount For U Price variance Quantity variance Total materials variance bolon benen nu amit avo 7. Goat Products has the following information about the use of labor in producing their product Little Kid. Actual costs & quantities: o bal Standard costs & quantities: Direct labor cost incurred $1,100,000 Direct labor rate/hr $21.50 Direct labor hours used 50,000 Hours to produce 1 unit 1.3 Units produced 40,000 Calculate the rate, time, and total labor variances and indicate if they are favorable or unfavorable. Variance amount For U Rate variance Time variance Total labor variance

Answer 1

Answer with working is given below

Price Variance Quantity variance Total Material Variance Variance Amount For U $5,394 Favourable -$2,480 Unfavourable $2,914 Favourable Direct Material Price Variance = ( Standard Rate - Actual Rate) * Actual Quantity Direct Material Quantity Variance = ( Standard Quantity for Actual production - Actual Quantity) * Standard Rate Working note Actual price Actual Quantity Actual Rate Actual Quantity Standard Rate Standard cost Standard Quantity Standard Rate 53,940 Actual Quantity at Actual Rate $3.90 53,940 $210,366 Actual Qty at Standard rate $4.00 53,320 $215,760 Standard Qty at Std rate $4.00 $213,280 Direct Material price variance Direct Material Quantity variance $5,394 Favourable $2,480 Unfavourable Total Direct Material cost Variance $2,914 Favourable Rate Variance Time Variance Total Labor variance Variance Amount For U -$25,000 Unfavourable $43,000 Favourable $18,000 Favourable Direct Labor Rate Variance = ( Standard Rate - Actual Rate) * Actual hours Direct Labor Efficiency Variance = (Standard hours for Actual production - Actual hours) * Standard Rate Working note Actual price Actual Rate Standard Rate Standard cost Standard I hours Standard Rate Actual Hours Actual Hours 50,000 Actual labor hours at actual rate $22.00 50,000 $1,100,000 Actual labor hours at std rate $21.50 52,000 $1,075,000 Standard hours at std rate $21.50 $1,118,000 Direct Labor Rate Variance Direct Labor Efficiency Variance -$25,000 Unfavourable $43,000 Favourable Total Direct Labor Cost variance $18,000 Favourable