Question

• 16- A job was budgeted to require 3 hours of labor per unit at $11.00 per hour. The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500. What is the direct labor rate variance?

  Multiple Choice

• $27,500 unfavorable.

• $22,000 favorable.

• $16,000 unfavorable.

• $16,000 favorable.

• $6,000 unfavorable.

  20- Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?

  Multiple Choice

• $400 unfavorable.

• $450 unfavorable.

• $2,500 unfavorable.

• $2,550 unfavorable.

• $2,950 unfavorable.

Answer 1

Question 1

Correct answer-----------$27,500 unfavorable.

Working

Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                  11.00	-	$                   12.25	)	x	22000
	-27500
	Variance		$           27,500.00			Unfavourable-U

.

		8000	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct labor	22000	$         12.25	$       269,500.00

Question 2

Correct answer-----------$2,500 unfavorable.

Working

Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	4000	-	4500	)	x	$              5.00
	-2500
	Variance		$             2,500.00			Unfavourable-U