Question

During March, Manhattan Fabrics Corporation manufactured 1,000 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March.
Direct material purchased: 36,000 yards at $ 1.38 per yard........................ $ 49,680
Direct material used: 19,000 yards at $ 1.38 per yard................................. 26,220
Direct labor: 4,200 hours at $ 9.15 per hour................................................... 38,430
The standard prime costs for one unit of Stylex are as follows:
Direct material: 20 yards at $ 1.35 per yard........................................................... $ 27
Direct labor: 4 hours at $ 9.00 per hour.................................................................... 36
Total standard prime cost per unit of output.......................................................... $ 63
Required:
Compute the following variances for the month of March, indicating whether each variance is favorable or unfavorable.
1. Direct- material price variance.
2. Direct- material quantity variance.
3. Direct- material purchase price variance.
4. Direct- labor rate variance.
5. Direct- labor efficiency variance.
(CPA, adapted)



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  • CreatedApril 22, 2014
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