Question

During June, Danby Company’s material purchases amounted to 8,000 pounds at a price of $6.20 per pound. Actual costs incurred in the production of 2,500 units were as follows:

Direct labor:	$	121,506	($15.40 per hour)
Direct material:	$	32,798	($6.20 per pound)

The standards for one unit of Danby Company’s product are as follows:

Direct Labor:	Direct Material:
Quantity, 3 hours per unit	Quantity, 2 pounds per unit
Rate, $15.00 per hour	Price, $5.90 per pound

   

Required:

Fill in the amounts in the tables below.

	Direct-Material Price and Quantity Variances Actual Material Cost Projected Material Cost Standard Material Cost Actual Quantity × Actual Price Actual Quantity × Standard Price Standard Quantity × Standard Price × × × pounds used per pound pounds used per pound pounds allowed per pound Direct-material price variance Direct-material quantity variance Direct-material variance

	Direct-Material Purchase Price Variances Actual Material Cost of Purchases Projected Material Cost of Purchases Actual Quantity × Actual Price Actual Quantity × Standard Price × × pounds purchased per pound pounds purchased per pound Direct-material purchase price variance

	Direct-Labor Rate and Efficiency Variances Actual Labor Cost Projected Labor Cost Standard Labor Cost Actual Hours × Actual Rate Actual Hours × Standard Rate Standard Hours × Standard Rate × × × hours used per hour hours used per hour hours allowed per hour Direct-labor rate variance Direct-labor efficiency variance Direct-labor variance

Answer 1

1. Direct Material		Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
	Actual Cost				Flexible				Standard Cost
	AQ	AP	Actual Cost		AQ	SP	Flexible Cost		SQ	SP	Standard Cost
	5290	6.2	32798		5290	5.9	31211		5000	5.9	29500
	32798/6.2			Price Variance 32798-31211				Quality 31211-29500	2500*2
				1587				1711
				Unfavorable				Unfavorable
					U	1587	Price Variance
					U	1711	Quantity Variance
					U	3298	Total Direct Material Variance
2. Direct Labor
	Actual Cost				Flexible				Standard Cost
	AH	AR	Actual Cost		AH	SR	Flexible Cost		SH	SR	Standard Cost
	7890	15.4	121506		7890	15	118350		7500	15	112500
	121506/15.4			Rate Variance 121506-118350				Quantity Variance 118350-112500	2500*3
				3156				5850
				Unfavorable				Unfavorable
					U	3156	Price Variance
					U	5850	Quantity Variance
Pounds Purchased Per Unit Total Actual 8000 6.2 49600 Budgeted 8000 5.9 47200 Variance 2400 Unfavorable					U	9006	Total Direct Material Variance