Refer to your results from Short Exercises S23- 6 and S23- 7.
Exercises S23- 6
Johnson, Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 0.8 pound per glass at a cost of $ 0.30 per pound. The actual result for one month’s production of 6,900 glasses was 1.1 pounds per glass, at a cost of $ 0.40 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.
Exercises S23- 7
Johnson, Inc. manufactures lead crystal glasses. The standard direct labor time is 0.3 hours per glass, at a cost of $ 13 per hour. The actual results for one month’s production of 6,900 glasses were 0.2 hours per glass, at a cost of $ 10 per hour. Calculate the direct labor cost variance and the direct labor efficiency variance.
1. For each variance, who in Johnson’s organization is most likely responsible?
2. Interpret the direct materials and direct labor variances for Johnson’s management.