Question: Mayhem Manufacturing provides the following standard cost data for one of its products: Direct materials. . . . . . . . . . .
Mayhem Manufacturing provides the following standard cost data for one of its products:
Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 feet at $3.15 per foot
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 hours at $12.55 per hour
During the month of February, the following actual cost data were accumulated:
Materials purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 feet at $3.00 per foot
Materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 feet
Direct labor incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000 hours at a total cost of $215,560
Units produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 units
Required:
Compute the following variances:
1. Materials price variance (this variance is computed at the time of purchase)
2. Materials quantity variance
3. Labor rate variance
4. Labor efficiency variance
Step by Step Solution
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