Question

ting Question 2 View Policies Current Attempt in Progress Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Support Direct materials (6 pounds at $1.60 per pound) $9.60 Direct labor (3 hours at $11.00 per hour) $33.00 During the month of April, the company manufactures 180 units and Incurs the following actual costs. Direct materials purchased and used (2.400 pounds) $4,320 Direct labor (560 hours) $6,048 Compute the total price, and quantity variances for materials and labor. Total materials variance $ Materials price variance $ Materials quantity variance $ Total labor variance Labor price variance Labor quantity variance e Textbook and Media MacBook Air

Answer 1

Solution

Total Material Variance	$           2,592.00	Unfavourable-U
Material Price Variance	$               480.00	Unfavourable-U
Material quantity variance	$           2,112.00	Unfavourable-U
Total Labor variance	$               108.00	Unfavourable-U
Labor rate variance	$               112.00	Favourable-F
Labor Efficiency variance	$               220.00	Unfavourable-U

Working

Actual DATA for		180	Units
	Quantity (AQ)	Rate (AR)	Actual Cost
Direct Material	2400	$       1.80	$            4,320.00
Direct labor	560	$     10.80	$            6,048.00

.

Standard DATA for		180	Units
	Quantity (SQ)	Rate (SR)	Standard Cost
	[A]	[B]	[A x B]
Direct Material	( 6 pound x 180 Units)=1080 pound	$                   1.60	$               1,728.00
Direct labor	( 3 Hour x 180 Units)=540 Hour	$                11.00	$               5,940.00

.

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                    1.60	-	$                     1.80	)	x	2400
	-480
	Variance		$                 480.00			Unfavourable-U
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	1080	-	2400	)	x	$              1.60
	-2112
	Variance		$             2,112.00			Unfavourable-U
Material Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$            1,728.00	-	$             4,320.00	)
	-2592
	Variance		$             2,592.00			Unfavourable-U
Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                  11.00	-	$                   10.80	)	x	560
	112
	Variance		$                 112.00			Favourable-F
Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	540	-	560	)	x	$           11.00
	-220
	Variance		$                 220.00			Unfavourable-U
Labor Spending Variance
(	Standard Cost	-	Actual Cost	)
(	$            5,940.00	-	$             6,048.00	)
	-108
	Variance		$                 108.00			Unfavourable-U