During June, Danby Company’s material purchases amounted to 6,000 pounds at a price of $7.30 per pound. Actual costs incurred in the production of 2,000 units were as follows:
Direct labor: | $116,745 ($18,10 per hour) |
Direct material: | $30,660($7.30 per pound) |
The standards for one unit of Danby Company’s product are as follows:
Direct labor: | Direct material: |
Quantity, 3 hours per unit | Quantity,2 pounds per unit |
Rate, $18 per hour | Price,$7 per pound |
Required: Compute the direct-material price and quantity variances and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
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