# Question: Valport Valve Company manufactured 15 600 units during March of a

Valport Valve Company manufactured 15,600 units during March of a control valve used by milk processors in its Shreveport plant. Records indicated the following:
Direct labor................................................. 80,200 hr. at \$ 10.95
Direct material purchased....................................... 50,000 lb. at \$ 5.20
Direct material used............................................... 46,200 lb.
The control valve has the following standard prime costs.
Direct material: 3 lb. at \$ 5.00 per lb........................................ \$ 15.00
Direct labor: 5 hr. at \$ 11.25 per hr...............................................56.25
Standard prime cost per unit..................................................... \$ 71.25

Required:
1. Prepare a schedule of standard production costs for March, based on actual production of 15,600 units.
2. For the month of March, compute the following variances, indicating whether each is favorable or unfavorable.
a. Direct- material price variance.
b. Direct- material quantity variance.
c. Direct- material purchase price variance.
d. Direct- labor rate variance.
e. Direct- labor efficiency variance.
3. Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: the standard direct- labor rate is \$ 12 per hour, and the standard direct- material price is \$ 4.90 per pound.

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• CreatedApril 22, 2014
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