Question

Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow Silver Crystals Direct labor Standard Standard Price Quantity (Rate) 0.45 oz. $21.ee per oz. 8.00 $ 0.3e crystal 2.ee hrs. $11.00 per hr. 2.0 per hr. Standard Unit Cost $ 9.45 2.40 22.ee During the month of January, Crystal Charm made 1,640 charms. The company used 703 ounces of silver (total cost of $15,466) and 13,170 crystals (total cost of $3,68760), and paid for 3,530 actual direct labor hours (cost of $37065.00). Required: 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January 2. Calculate Crystal Charm's direct labor variances for the month of January

Answer 1

Answers

a.

	Silver		Crystals
Direct material Price Variance	$ 703.00	U	$ 263.40	F
Direct material Quantity Variance	$ 735.00	F	$   15.00	U

b.

Labor rate Variance	$ 1,765.00	F
Labor efficiency Variance	$ 2,750.00	U

Calculations:

Material - silver

Standard Price	$ 21.00
Standard quantity	738.00
Actual price	$ 22.00
Actual Quantity	703.00

Material Price Variance = (Standard Price-Actual price)*Actual Quantity

Material Price Variance = ($ 21 - $ 22) * 703

Material Price Variance = - $ 703

Material Quantity Variance = (Standard quantity-Actual Quantity)*Standard Price

Material Quantity Variance = (738 - 703) * $ 21

Material Quantity Variance = $ 735 (F)

Material - Crystal

Standard Price	$        0.30
Standard quantity	13,120.00
Actual price	$        0.28
Actual Quantity	13,170.00

Material Price Variance = (Standard Price-Actual price)*Actual Quantity

Material Price Variance = (0.3 - 0.28) * 13170

Material Price Variance = $ 263.4

Material Quantity Variance = (Standard quantity-Actual Quantity)*Standard Price

Material Quantity Variance = (13120 - 13170) * 0.3

Material Quantity Variance = - $ 15

Labor

Standard rate	$    11.00
Standard hours	3,280.00
Actual rate	$    10.50
Actual hours	3,530.00

Labor rate Variance = (Standard rate-Actual rate)*Actual hours

Labor rate Variance = (11 - 10.5) * 3530

Labor rate Variance = 1765 (F)

Labor hour Variance = (Standard hours-Actual hours)*Standard rate

Labor hour Variance = (3280 - 3530) * $11

Labor hour Variance = - $ 2750

In case of any doubt, please comment.