Question

Rompola Corporation manufactures futons with the following standard costs per unit:
Direct materials .................................................. 80 yards at $ 2.00 per yard
Direct labor ........................................................ 20 hours at $ 20 per hour
The actual results for the year were as follows:
Direct materials ... 120,000 yards purchased at a total cost of $ 264,000; 118,000 yards used
Direct labor ........................................... 32,000 hours worked at a total cost of $ 604,800
Production ....................................................................................................... 1,500 units
Required
A. Compute the following variances:
1. Direct materials price variance
2. Direct materials usage variance
3. Direct materials inventory variance
4. Direct labor price variance
5. Direct labor usage variance
B. Interpret each of the variances calculated.


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  • CreatedMarch 25, 2015
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