Question

1. Direct Materials and Direct Labor Variance Analysis

   Abbeville Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows:

   Standard wage per hour	$13.20
   Standard labor time per faucet	10 min.
   Standard number of lbs. of brass	1.2 lbs.
   Standard price per lb. of brass	$11.75
   Actual price per lb. of brass	$12.00
   Actual lbs. of brass used during the week	10,753 lbs.
   Number of faucets produced during the week	8,700
   Actual wage per hour	$13.6
   Actual hours for the week (40 employees × 35 hours)	1,400 hrs.

   Required:

   a. Determine the A detailed estimate of what a product should cost.standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

   Direct materials standard cost per unit	$
   Direct labor standard cost per unit	$
   Total standard cost per unit	$

   b. Determine the direct materials Price variance is the difference between the actual and standard prices, multiplied by the actual quantity.price variance, direct materials The cost associated with the difference between the standard quantity and the actual quantity of direct materials used in producing a commodity.quantity variance, and total direct materials The difference between actual cost and standard cost at actual volumes.cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

   Direct Materials Price Variance	$	Unfavorable Favorable Unfavorable
   Direct Materials Quantity Variance	$	Unfavorable Favorable Unfavorable
   Total Direct Materials Cost Variance	$	Unfavorable Favorable Unfavorable

   c. Determine the direct labor The cost associated with the difference between the standard rate and the actual rate paid for direct labor used in producing a commodity.rate variance, direct labor The cost associated with the difference between standard and actual hours of direct labor spent for producing a commodity.time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

   Direct Labor Rate Variance	$	Unfavorable Favorable Unfavorable
   Direct Labor Time Variance	$	Favorable Favorable Unfavorable
   Total Direct Labor Cost Variance	$	Favorable Favorable Unfavorable

   Feedback

   Unfavorable variances can be thought of as increasing costs (a debit). Favorable variances can be thought of as decreasing costs (a credit).

   Learning Objective 2, Learning Objective 3.

Loading item

There was an error loading this item. If this continues to occur, please contact Technical Support.

Check My Work

• Previous
• Next

• 100% Correct
• Partially Correct
• Incorrect
• Needs Instructor Grading

Basic Calculatorclose

-7040

UseEntBSBSpCEHomCEnd

789+

456-

123*

0.=/

Answer 1

a
Direct materials standard cost per unit	14.10	=1.2*11.75
Direct labor standard cost per unit	2.20	=13.2*(10/60)
Total standard cost per unit	16.30
b
Direct Materials Price Variance	2688	Unfavorable	=10753*(12-11.75)
Direct Materials Quantity Variance	3678	Unfavorable	=11.75*(10753-8700*1.2)
Total Direct Materials Cost Variance	6366	Unfavorable	=(10753*12)-(8700*1.2*11.75)
c
Direct Labor Rate Variance	560	Unfavorable	=1400*(13.6-13.2)
Direct Labor Time Variance	-660	Favorable	=13.2*(1400-8700*10/60)
Total Direct Labor Cost Variance	-100	Favorable	=(1400*13.6)-(8700*13.2*10/60)