Question

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Betty's Bakery has the following standard cost sheet for one unit of its most popular cake: SP SQ $ 1.50 per pound $12.00 per hour 1.2 pounds 0.8 hours Direct materials Direct labor During the month of May, the company made 900 cakes and incurred the following actual costs. Direct materials purchased and used (1,340 pounds) $1,742 Direct labor (960 hours) $11,040 Required: 1. Calculate the direct materials price variance. 2. Calculate the direct materials quantity variance. 3. Calculate the direct materials variance 4. Calculate the direct labor rate variance. 5. Calculate the direct labor efficiency variance. 6. Calculate the direct labor spending variance. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) 268 F Direct materials price variance 1 U U F U 2. Direct materials quantity variance 3. Total direct materials spending variance 4. Direct labor rate variance 5 Direct labor efficiency variance 6 Total direct labor spending variance

Answer 1

1) Material price variance = (1.5*1340-1742) = 268 F

2) Material quantity variance = (900*1.2-1340)*1.5 = 390 U

3) Total material spending variance = (900*1.5*1.2)-1742 = 122 U

4) Labor rate variance = (12*960-11040) = 480 F

5) Labor efficiency variance = (900*.8-960)*12 = 2880 U

6) Labor spending variance = (900*.8*12)-11040 = 2400 U