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.) Answer is not complete. Direct Labor per hour 3.28 X hours per unit 2.90 hours 16.00 per hour 7,500 units $ 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 Direct Material 12.00 per lb 6.80lbs per unit 7.00 lbs per unit 11.00 per lb 7,500 units 52,500 F 18,000U 34,500 F $ $ $ $ $ $ 21,750U 33,750 12,000 F F

Answer 1

				Direct labor		Direct Material
Standard price or rate per unit of output				15	per hour	12	per lb
Standard quantity per unit of output				3.2	hrs per unit	6.8	lbs per unit
Actual qunatity used per unit of output				2.9	hrs.	7	lbs per unit
Actual price or rate per unit of output				16	per hr	11	per lb
Actual output				7,500	units	7,500	units
Direct-material price variance						52,500	F
Direct-material quantity variance						18,000	U.
Total direct-material variance						34,500	F
Direct labor-rate variance				21,750	U
Direct-labor efficiency variance				33,750	F
total direct-labor variance				12,000	F
Direct labor rate variance = direct labor efficiency variance-total direct labor variance
Direct labor rate variance					Direct materials price variance
(Actual price - standard price)*Actual hrs					(actual price -standard price)*AQ purchased
(16 -x)*21750		=	21,750		(11-12)*x	=	52500
348000	-21750x	=	21750		x	=	52,500
	x	=	15			52500/7500=		7
Direct labor efficiency variance					Direct material quantity variance
(Actual hrs - standard hrs )*standard rate					(Actua qty - standard qty)*standard rate
(21750 - 7500*x)*15=			33,750		(52,500 - 7500*x)*12 =			18,000
326250 -112500x=		33750			630,000 - 90000x		=	18,000
x	=	(326250+33750)/112500			x =	(630000-18000)/90000
		3.2				6.8