1.A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5 per pound. Standard direct labor was budgeted at 0.5 hour per widget at $15 per hour. The actual usage in the current year was 25,000 pounds (an actual cost of $4.75 per pound) and 3,000 hours (an actual rate of $17 per pound )to produce 10,000 widgets. What was the direct labor usage variance?
A. $30,000 favorable. B. $25,000 favorable. C. $25,000 unfavorable. D. $30,000 unfavorable.
2. The standard direct material cost to produce a unit of Lem is 4 meters of material at $2.50 per meter. During May of the current year, 4,200 meters of material costing $10,080 were purchased and used to produce 1,000 units of Lem. What was the material price variance for May?
a.$80 unfavorable b. 420 favorable c.420 favorable d. 500 favorable e.500 unfavorable
Answers
Correct Answer = Option ‘A’ $ 30000 favourable
Labour Efficiency Variance |
||||||
( |
Standard Hours = 10000 units x 0.5hrs |
- |
Actual Hours |
) |
x |
Standard Rate |
( |
5000 |
- |
3000 |
) |
x |
$ 15.00 |
30000 |
||||||
Variance |
$ 30,000.00 |
Favourable-F |
Correct Answer = Option ‘B’ $ 420 Favourable
Material Price Variance |
||||||
( |
Standard Rate |
- |
Actual Rate = $ 10080 / 4200 meters |
) |
x |
Actual Quantity |
( |
$ 2.50 |
- |
$ 2.40 |
) |
x |
4200 |
420 |
||||||
Variance |
$ 420.00 |
Favourable-F |
1.A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5...
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