Question

e Edit View History Bookmarks Window Help dyson airwrap- Google Search Ch 08 Ex 8-15 Not found<I> に12 Qwhen units O Done Saved Help Save & Exit Submit 3-15 Check my work co ory is G Exercise 8-15 Direct materials and direct labor variances LO P2 The following information describes production activities of Mercer Manufacturing for the year Actual direct materials used Actual direct labor used Actusl units produced 29,000 lbs. at $5.10 per 1b. 8,100 hours for a total of $164,430 48,000 Budgeted standards for each unit produced are 0.50 pounds of direct material at $5.05 per pound and 10 minutes of direct labor at $22.00 per hour inco AQ Actual Quantity SQ = Standard Quantity AP Actual Price SP Standard Price et inc AH Actual Hours SH- Standard Hours AR Actual Rate SR Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable, t mate overhe Prev 10, 1m Next 18 MacBook Ai

Answer 1

	Calculation of Standard Material Cost for 48000 units
	Standard Unit (KG)	Standard Rate (Per KG)	Standard Material Cost
	24000	$                     5.05	$                      1,21,200
	(48000 Unit X 0.5)
	Calculation of the Actual Cost for producing 48000 Units
	Actual Qty	Actual Rate	Actual Material Purchase
	29000	$                     5.10	$                1,47,900.00
	Material price Variance = (Standard Price - Actual Price) X Actual Qantity)
	Material price Variance = ($ 5.05 - $ 5.10) X 29000
	Material price Variance = $0 .05 X 29000
	Material price Variance = $ 1,450 (unfavourable)
	Material Quantity Variance = (Actual Quantity used - Standard quantiy ) X Standard Cost
	Material Quantity Variance = (29,000 units - 24,000 units) X $ 5.05
	Material Quantity Variance = 5000 units X $ 5.05
	Material Quantity Variance = $ 25,250 Unfavorable
	Calculation of Standard Cost for 50000 units
	Standard Time	Standard Rate	Standard Cost per unit
	8000	$                  22.00	$                      1,76,000
	Hrs (48,000 X0.10)/60	Per Hours
	Actual Cost for 50,000 Units
	Actual Time	Standard Rate	Actual Cost
	8100	$                  20.30	$                      1,64,430
	Hrs	Per Hours
	Labour Rate Variance = (Actual Rate - Standard Rate) X Actual Hours
	Labour Rate Variance =                 (		$                            20.30	'-'	$             22.00	) X	$    8,100.00
	Labour Rate Variance =		$                              1.70	X	$       8,100.00
	Labour Rate Variance =		13770	(favorable)
	Labour Efficiency Variance = (Actual Hours - Standard Hours ) X Standard Rate
	Labour Efficiency Variance = (		8,100	'-'	8,000	) X	$          22.00
	Labour Efficiency Variance =		$                          100.00	X	$             22.00
	Labour Efficiency Variance =		2200	(Unfavorable)