Question

Portland State University Study Guide Exam # 2 Part III - Variances 1. The Gem Company manufactures Product X. Product X requires 5 units of direct materials at a standard price of $2.00 per unit. During the month, Gem Company purchased 10,000 units of direct materials for $2.10 each. This month's production used 9,500 units of direct materials. Output of Product X was 2,000 units. Required: a Compute the materials price variance based on units used in production b. Compute the materials efficiency variance. + 2. The Bronze Company produces Product Y. Direct labor – standard input for one output = .30 Direct labor-standard cost per input - $9.00 standard input. for outpot stranden cost per input- und Actual Results: stand cost per output- unit. 0.3 x 9 = 92.7 4,000 Units of output $11,470 Labor costs 1,240 Labor hours of input $ 9.25 Actual price per hour Required: a. What is the manufacturing direct labor price variance? b. What is the manufacturing direct labor efficiency variance?

Answer 1

Material buice Vasion → Standard - Ackel - Price brice Umib wedimet Production Q - 2.10 x 9500 8 950 Adverse b) Material Effeciemy Variances Shamdard units lou_ Alkuely stomdord brico actual output unib X dramdded De rased / of o 15x2000) – 9500] x 2 $1000 Favourable R.) al Direct Labour Price Vascianco- -) fotamdard coat - Attestore y Achiel Labores hts o impur Per totumit lex output seat hour (9 – 9.25) x 1240 - $310 Adverse b) Direer Labour effeciemy Variance's afstandard howes - Actuat havax femelaseet tout for a that output - per imput 10.30% 4000) – 1240) x 9 360 Advent