Question

Required information [The following information applies to the questions displayed below.] A manufactured product has the following information for June. Direct materials Direct labor Overhead Units manufactured Standard (7 lbs. @ $8 per lb.) (2 hrs. @ $15 per hr.) (2 hrs. @ $11 per hr.) Actual 55,900 lbs. @ $8.10 per lb. 15,500 hrs. @ $15.40 per hr. $179, 700 7,900 Compute the direct materials price variance and the direct materials quantity variance. Indicate whether each variance is favorable or unfavorable. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

Answer 1

Actual Cost | AQL X 55900 X 452790 AP 8.10 AQ 55900 x X 447200 SP 8.00 Standard Cost SQL X 55300 X 442400 SP 8.00 5590 4800 Direct Material Price Varaince Direct Material Quantity Varaince Total Direct Material Varaince 5590 4800 10390 Unfavorable Unfavorable Unfavorable Actual Cost AH X 15500 X 238700 AR 15.40 AH 15500 X X 232500 SR 15.00 Standard Cost SH X 15800 X 237000 SR 15.00 6200 4500 Direct Labor Rate Varaince Direct Labor Efficiency Variance Total Direct Labor Variance 6200 4500 1700 Unfovarable Favorable Unfovarable