Question

Part 1, 2, & 3

Check my work During May. Joliet Fabrics Corporation manuf nformation from the Stylex production department also pertains t octured 620 unts floyer fabric with the trade name Stylex The tollowing Direet material purchased: 19,200 yards at $1.50 per yard Direct material used: 10,700 yards at $1.50 per yard Direct labor: 3,300 hours at $9.27 per hour $ 28,800 16,050 30,591 The standard prime costs for one unit of Stylex are as follows Direct material: 20 yards at $1.47 per yard Direct labor: 4 hours at $9.00 per hour $29.40 36.00 Total standard prime cost per unit of output-$65.10 Required: Compute the following variances for the month of May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). 1. Direct-material price variance Unfavorable

Answer 1

Solution 1:

Standard quantity of material for actual production = 620 * 20 = 12400 yards

Actual quantity of material purchased = 19200 yards

Actual quantity of material consumed = 10700 yards

Standard price of material = $1.47 per yard

Actual price of material = $1.50 per yard

Material price variance = (SP - AP) * AQ used = ($1.47 - $1.50) * 10700 = $321 U

Material quantity variance = (SQ - AQ) * SP = (12400 - 10700) * $1.47 = $2,499 F

Material purchase price variance = (SP - AP) * AQ Purchased = ($1.47 - $1.50) * 19200 = $576 U

Standard hours of direct labor for actual production = 620 * 4= 2480 hours

Actual hours of direct labor = 3300 hours

Standard rate of direct labor = $9 per hour

Actual rate of direct labor = $9.27 per hour

Direct labor rate variance = (SR - AR) * AH = ($9 - $9.27) * 3300 = $891 U

Direct labor efficiency variance = (SH - AH) * SR = (2480 - 3300) * $9 = $7,380 U