Green Packaging Company makes plant-based baskets for food wholesalers. Each basket requires 0.8 gram of material G and 0.6 gram of an additive that includes color and hardening agents. The standard prices are $0.15 per gram of material G and $0.09 per gram of additive. Two kinds of direct labor—molding and trimming/packing—are required to make the baskets. The direct labor time and rate standards for a batch of 100 baskets are as follows: molding, 1.0 hour per batch at an hourly rate of $12; and trimming/packing, 1.2 hours per batch at $10 per hour.
During the year, the company produced 48,000 baskets. It used 38,600 grams of material G at a total cost of $5,404 and 28,950 grams of additive at $2,895. Actual direct labor included 480 hours for molding at a total cost of $5,664 and 560 hours for trimming/packing at $5,656.

1. Compute the direct materials price and quantity variances for both material G and the additive.
2. Compute the direct labor rate and efficiency variances for the molding and trimming/packing processes.

  • CreatedMarch 26, 2014
  • Files Included
Post your question