Direct Materials and Direct Labor Variance Analysis
Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Faucet Industries has 40 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
Standard wage per hour | $15.00 |
Standard labor time per faucet | 20 min. |
Standard number of lbs. of zinc | 2.1 lbs. |
Standard price per lb. of zinc | $10.25 |
Actual price per lb. of zinc | $10.50 |
Actual lbs. of zinc used during the week | 19,500 lbs. |
Number of faucets produced during the week | 9,000 |
Actual wage per hour | $15.50 |
Actual hours per week | 1,440 hrs. |
Required:
a. Determine the standard cost per faucet for direct materials and direct labor. Do not round intermediate calculations and round your answers to the nearest cent.
Direct materials standard cost per faucet | $ | |
Direct labor standard cost per faucet | ||
Total cost per faucet | $ |
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount
Price variance | $ | ||
Quantity variance | |||
Total direct materials cost variance | $ |
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.
Rate variance | $ | ||
Time variance | |||
Total direct labor cost variance | $ |
a | |||
Direct materials standard cost per faucet | 21.53 | =2.1*10.25 | |
Direct labor standard cost per faucet | 5.00 | =15*(20/60) | |
Total cost per faucet | 26.53 | ||
b | |||
Price variance | 4875 | Unfavorable | =19500*(10.5-10.25) |
Quantity variance | 6150 | Unfavorable | =10.25*(19500-9000*2.1) |
Total direct materials cost variance | 11025 | Unfavorable | =(19500*10.5)-(9000*2.1*10.25) |
c | |||
Rate variance | 720 | Unfavorable | =1440*(15.5-15) |
Time variance | -23400 | Favorable | =15*(1440-9000*20/60) |
Total direct labor cost variance | -22680 | Favorable | =(1440*15.5)-(9000*15*20/60) |
Direct Materials and Direct Labor Variance Analysis Faucet Industries Inc. manufactures faucets in a small manufacturing...
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Direct Materials and Direct Labor Variance Analysis
Shasta Fixture Company manufactures faucets in a small
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Manufacturing has 70 employees. Each employee presently provides 38
hours of labor per week. Information about a production week is as
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Standard wage per hr.
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Standard labor time per faucet
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Standard number of lbs. of brass
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Standard price per lb. of brass
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Actual price per lb. of brass
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