Question

The Morgan Restaurant Group manufactures the bags of baren French hes used at ds banchised restauwts last week. Mogan's purchased and used 103,000 pounds of poet es a prce of$0 65 per pound During the week, ,800 direct labor hours wese incurred in the plant at a rate of $12 20 per hour. The standard price per pound of potatoes is $0.80, and the standard direct lao sate is $12.05 per hout Standads indicate that for the namber of bags of rozen thies produced, the factory should have used 100,000 pounds of potatoes and 1,600 hours of direct labor Read the teqairements Requiremeant 1. Determine the direct matesial price and quantity variances Be sure to label each variance as taorable or unfavorab answers to the nearest whole dlar Label the vnances as favorable (F) er urtavorable (U) Attrewtons used Drect mat Requrements Begin by deteemining the formula for the price varniance, then compute the price variance for direct materials 1. Determine the deect material price and quantity variances. Be sure to label Think of a plausible explanation for the variances found in Requieement 1 3. Determine the direct labor rate and efficiency variances. Be sure to label each variance as tavorable or untaorable 4. Could the explanation for the labor variances be tied to the material variances? Explain Print Done

Answer 1

1	Actual rate	0.65	per pound
	Direct material price variance =	(Standard rate -Actual rate) * Actual quantity
	Direct material price variance =	(.80-.65) * 103000
	Direct material price variance =	15450	Favorable
2	Standard Material for actual production	100000	Pounds
	Direct material quantity variance=	(Actual material -Standard material for acual production) *Standard rate
	Direct material quantity variance=	(103000-100000)*.80
	Direct material quantity variance=	2400	UnFavorable
3	Actual rate	12.20	per hour
	Labor rate variance =	(Actual rate - Standard rate) * Actual hours
	Labor rate variance =	(12.20-12.05) * 1800
		270	UnFavorable
4	Standard labor hours for actual production	1600	Hours
	Labor Effeciency variance=	(Actual hours -Standard hours for acual production) *Standard rate
	Labor Effeciency variance=	(1800-1600)* 12.05
		2410	UnFavorable