Zack Manufacturing Company makes a product that is processed through two departments: cutting and final. All materials are added in the first department. During the month of March 2016, the company made 6,000 units of the product. Standard costs and actual costs for materials and labor are given below:
STANDARD COSTS
Raw materials
Framing: 11 square feet at $0.30 per square foot....................$ 3.30
Filler: 14 pounds at $0.19 per pound....................................2.66
Standard materials cost per unit.......................................$ 5.96
Direct labor
Cutting dept.: 1.4 hour at $15.00 per hour..........................$21.00
Final dept.: 0.6 hour at $22.00 per hour................................13.20
Standard direct labor cost per unit...................................$34.20
ACTUAL COSTS
Raw materials
Framing: 62,700 square feet at $0.310 per square foot.....$ 19,437.00
Filler: 84,800 pounds at $0.17 per pound......................14,416.00
Total actual materials cost.....................................$ 33,853.00
Direct labor
Cutting dept.: 8,200 hours at $15.30 per hour............$125,460.00
Final dept.: 3,960 hours at $21.80 per hour..................86,328.00
Total actual direct labor cost.................................$211,788.00
INSTRUCTIONS
1. Prepare a comparison of the actual cost of materials with the standard cost of materials for the 6,000 units of product. Then prepare an analysis of the materials variances.
2. Prepare a comparison of the actual cost of labor with the standard cost of labor for the 6,000 units of product. Then prepare an analysis of the labor variances.
Analyze:
What total variance in labor was reported by the final department?