Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet.
Question:
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:
During the month of January, Crystal Charm made 1,800 charms. The company used 420 ounces of silver (total cost of $9,240) and 3,650 crystals (total cost of $803), and paid for 2,880 actual direct labor hours (cost of $42,480).
Required:
1. Calculate Crystal Charm’s direct materials variances for silver and crystals for the month of January.
2. Calculate Crystal Charm’s direct labor variances for the month of January.
3. Identify a possible cause of eachvariance.
Step by Step Answer:
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips