Question

Zack Manufacturing Company makes a product that is processed through two departments: cutting and final. All materials are added in the first department. During the month of March 2019, the company made 4,400 units of the product. Standard costs and actual costs for materials and labor are given below:

STANDARD COSTS
Raw materials
Framing: 11 square feet at $0.30 per square foot	$	3.30
Filler: 14 pounds at $0.25 per pound		3.50
Standard materials cost per unit	$	6.80
Direct labor
Cutting dept.: 1.0 hour at $15.00 per hour	$	15.00
Final dept.: 0.60 hour at $16.00 per hour		9.60
Standard direct labor cost per unit	$	24.60

ACTUAL COSTS
Raw materials
Framing: 46,000 square feet at $0.31 per square foot	$	14,260.00
Filler: 62,200 pounds at $0.23 per pound		14,306.00
Total actual materials cost	$	28,566.00
Direct labor
Cutting dept.: 4,300 hours at $15.30 per hour	$	65,790.00
Final dept.: 2,900 hours at $15.80 per hour		45,820.00
Total actual direct labor cost	$	111,610.00

Required:

1. Prepare a comparison of the actual cost of materials with the standard cost of materials for the 4,400 units of product. Then prepare an analysis of the materials variances.
2. Prepare a comparison of the actual cost of labor with the standard cost of labor for the 4,400 units of product. Then prepare an analysis of the labor variances.

Analyze:
What total variance in labor was reported by the final department?

Prepare a comparison of the actual cost of materials with the standard cost of materials for the 4,400 units of product. Then prepare an analysis of the materials variances.

	ZACK MANUFACTURING COMPANY Analysis of Materials Variances For Month of March 2019 Costs Variances Cost Elements Standard Actual Quantity Price Framing Standard Actual Quantity variance Price variance Filler Standard Actual Quantity variance Price variance Totals $0 $0 $0 $0

Prepare a comparison of the actual cost of labor with the standard cost of labor for the 4,400 units of product. Then prepare an analysis of the labor variances.

	ZACK MANUFACTURING COMPANY Analysis of Labor Variances For Month of March 2019 Costs Variances Cost Elements Standard Actual Quantity Price Cutting Department Standard Actual Time variance Rate variance Final Department Standard Actual Time variance Price variance Totals $0 $0 $0 $0

Answer 1

Answers

ZACK MANUFACTURING COMPANY
Analysis of Materials Variances
For Month of March 2019
	Costs		Variances
Cost Elements	Standard	Actual	Quantity		Price
Framing
Standard	$14,520
Actual		$14,260
Quantity variance			$720	F
Price variance					$460	U
Filler
Standard	$15,400
Actual		$14,306
Quantity variance			$150	U
Price variance					$1,244	F
Totals	$29,920	$28,566	$570	F	$784	F

--

ZACK MANUFACTURING COMPANY
Analysis of Labor Variances
For Month of March 2019
	Costs		Variances
Cost Elements	Standard	Actual	Quantity		Price
Cutting Department
Standard	$66,000
Actual		$65,790
Time variance			$1,500	F
Rate variance					$1,290	U
Final Department
Standard	$42,240
Actual		$45,820
Time variance			$4,160	U
Price variance					$580	F
Totals	$108,240	$111,610	$2,660	U	$710	U