Question

Part of your company's accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Round "per unit" answer values to 2 decimal places.) $ Direct Labor per hour hours per unit 2.00 hours 13.00 per hour 6,000 units Direct Material 9.00 per lb lbs per unit lbs per unit 8.00 per lb 6,000 units 40,200 F Standard price or rate per unit of input Standard quantity per unit of output Actual quantity used per unit of output Actual price or rate per unit of input Actual output Direct-material price variance Direct-material quantity variance Total direct-material variance Direct-labor rate variance Direct-labor efficiency variance Total direct-labor variance $ $ $ 29,400 F $ $ 28,800F 16,800 F

Answer 1

	Direct Labor		Direct Material
Standard Rate	12		9
Standard Quantity	14400		39000
Actual Quantity	2		40,200
Actual Rate	13		8
Actual Output	6000		6000
Direct material price variance			40200	F
Direct material quantity variance			10800	U
Total direct material variance			29400	F
Direct labor rate variance	12000	U
direct labor efficiency variance	28800	F
Total direct labor variance	16800	F
Direct labor rate variance = (Standard Rate - Actual Rate)*Actual Hours
(Standard rate - 13)*6,000*2 = -12,000
Standard Rate = 12
Direct Labor Efficiency Variance = (Standard Quantity - Actual Quantity)*Standard price
(Standard Quantity - 12000)*12 = 28,800
Standard Quantity = 14,400
Direct material Price variance = (Standard Rate - Actual Rate)*Actual Quantity
1*Actual Quantity= 40,200
Actual Quantity = 40,200
Direct material quantity variance = (Standard Quantity - Actual Quantity)*Standard price
(Standard Quantity - 40,200)*9 = -10,800
Standard Quantity = 39,000