Question

E9-5 Calculating Direct Materials and Direct Labor Variances [LO 9-3, 9-4] Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Standard Quantity Standard (Rate) 0.65 oz. $25.00 per oz. 5.00 2.00 hrs. $15.00 per hr Standard Unit Cost $16.25 Silver Crystals Direct labor $0.50 per crystal 2.50 30.00 During the month of January, Crystal Charm made 1,500 charms. The company used 935 ounces of silver (total cost of $24,310) and 7,550 crystals (total cost of $3,624.00), and paid for 3,150 actual direct labor hours (cost of $45,675.00) Required 1. Calculate Crystal Charm's direct materials variances for silver and crystals for the month of January. (Round your intermediate calculations and final answers to 2 decimal places Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Silver Crystals Direct Material Price Variance Direct Material Quantity Variance ct abr tesmiate e 2. Calculate Crystal Charm's direct labor variances for the month of January. (Round your intermediate calculations and final answers to 2 decimal places.Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Direct Labor Rate Variance Direct Labor Efficiency Variance

Answer 1

1) Direct material price variance Silver = (25*935-24310) = 935 U

Direct material quantity variance = (1500*.65-935)*25 = 1000 F

Direct material price variance Crystal = (0.50*7550-3624) = 151 F

Direct material quantity variance = (1500*5-7550)*..50 = 25 U

2) Direct labor rate variance = (15*3150-45675) = 1575 F

Direct labor efficiency variance = (1500*2-3150)*15 = 2250 U