During May, Joliet Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name

Question:

During May, Joliet Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May.

Direct material purchased: 18,000 yards at $1.38 per yard................................ $24,840

Direct material used: 9,500 yards at $1.38 per yard............................................ 13,110

Direct labor: 2,100 hours at $9.15 per hour.......................................................... 19,215

The standard prime costs for one unit of Stylex are as follows:

Direct material: 20 yards at $1.35 per yard.............................................................. $27

Direct labor: 4 hours at $9.00 per hour...................................................................... 36

Total standard prime cost per unit of output........................................................... $63

Required:

Compute the following variances for the month of May, indicating whether each variance is favorable or unfavorable.

1. Direct-material price variance.

2. Direct-material quantity variance.

3. Direct-material purchase price variance.

4. Direct-labor rate variance.

5. Direct-labor efficiency variance.

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A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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