Question

2. Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow:

Silver Crystals Direct labor Standard Quantity Standard (Rate) 0.55 oz. $23.00 per oz. 3.00 $ 0.40 per crystal 2.00 hrs. $13.00 per hr. Standard Unit Cost $ 12.65 1.20 26.00 During the month of January, Crystal Charm made 1,660 charms. The company used 873 ounces of silver (total cost of $20,952) and 5,030 crystals (total cost of $1,911.40), and paid for 3,470 actual direct labor hours (cost of $43,375.00). Required: 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. (Round your intermediate calculations and final answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Silver Crystals Direct Material Price Variance Direct Material Quantity Variance Direct Material Quantiy variance H 2. Calculate Crystal Charm's direct labor variances for the month of January. (Round your intermediate calculations and final answers to 2 decimal places.Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance

Answer 1

Crystals Particulars Direct Material SQL SP 49800. 4 AQ 5030 AP 0.38 Material Price Variance (MPV) = (SP-AP) AQ >>MPV = ( 0.4 - 0.38 ) * 5030 >>MPV = 100.60 Favorable Material Quantity Variance (MQV) = ( SQ - AQ) SP >>MQV = ( 4980 - 5030 ) * 0.4 >>MQV = -20.00 Unfavorable Note -1 SQ = Standard Quantity for Actual output SP = Standard Price per Raw material AQ = Actual Quantity consumed AP = Actual Price per Raw material

Silver Particulars Direct Material SQ 913 SP 23 AQ 873 AP 24 Material Price Variance (MPV) = (SP-AP) AQ >>MPV = ( 23 - 24 ) * 873 >>MPV = -873.00 Unfavorable Material Quantity Variance (MQV) = (SQ-AQ) SP >>MQV = ( 913 - 873 ) * 23 >>MQV = 920.00 Favorable Note -1 SQ = Standard Quantity for Actual output SP = Standard Price per Raw material AQ = Actual Quantity consumed AP = Actual Price per Raw material

Particulars Direct Labour SH 3320 SR | 13 AHP 3470 AR 12.5 Labour Rate Variance (LV) = ( SR - ARAHP >>LRV = ( 13 - 12.5) * 3470 >>LRV = 1735 Favourable Labour Efficiency Variance (LEV) = ( SH - AHW) SR >>LEV = ( 3320 - 3470 ) * 13 >>LEV = -1950 Unfavourable Note-1 SH = Standard Hours per Actual Output SR = Standard Rate per Hour AHP = Actual Hours Paid AR = Actual Rate per Hour.