Question

Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.
Direct materials (10 lbs. @ $3 per lb.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30
Direct labor (4 hrs. @ $6 per hr.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
During June the company incurred the following actual costs to produce 9,000 units.
Direct materials (92,000 lbs. @ $2.95 per lb.) . . . . . . . . . . . . . . . . . . . . .$271,400
Direct labor (37,600 hrs. @ $6.05 per hr.). . . . . . . . . . . . . . . . . . . . . . . . 227,480
Compute the
(1) Direct materials price and quantity variances
(2) Direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.


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  • CreatedApril 23, 2015
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