Question

Part of your company's accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Round "per unit" answer values to 2 decimal places.) $ Direct Labor per hour hours per unit 2.00 hours 13.00 per hour 6,000 units Direct Material 9.00 per lb lbs per unit lbs per unit 8.00 per lb 6,000 units 40,200 F Standard price or rate per unit of input Standard quantity per unit of output Actual quantity used per unit of output Actual price or rate per unit of input Actual output Direct-material price variance Direct-material quantity variance Total direct-material variance Direct-labor rate variance Direct-labor efficiency variance Total direct-labor variance $ $ $ 29,400 F $ $ 28,800F 16,800 F

Answer 1

				Direct labor		Direct Material
Standard price or rate per unit of output				12	per hour	9	per lb
Standard quantity per unit of output				2.4	hrs per unit	6.5	lbs per unit
Actual qunatity used per unit of output				2	hrs.	6.7	lbs per unit
Actual price or rate per unit of output				13	per hr	8	per lb
Actual output				6,000	units	6,000	units
Direct-material price variance						40,200	F
Direct-material quantity variance						10,800	U.
Total direct-material variance						29,400	F
Direct labor-rate variance				12,000	U
Direct-labor efficiency variance				28,800	F
total direct-labor variance				16,800	F
Direct labor rate variance = direct labor efficiency variance-total direct labor variance
Direct labor rate variance					Direct materials price variance
(Actual price - standard price)*Actual hrs					(actual price -standard price)*AQ purchased
(13 -x)*12000		=	12,000		(8 - 9)*x	=	40200
156000	-12000 x	=	12000		x	=	40,200
	x	=	12			40,200/6000=		6.7
Direct labor efficiency variance					Direct material quantity variance
(Actual hrs - standard hrs )*standard rate					(Actua qty - standard qty)*standard rate
(12000 - 6000*x)*12=			28,800		(40,200 - 6000*x)*9 =			10,800
144,000 - 72000x =		28800			361,800 - 54000x		=	10,800
x	=	(144000+28800)/72000			x =	(361800-10800)/54000
		2.4				6.5