1) Whitewater Company produces a product that has the following standard costs:

Direct materials: 4 pounds at $5 per pound	$20
Direct labor: 3 hours at $6 per hour	18
Manufacturing overhead: 150% of direct labor	27
	$ 65

Whitewater's purchasing agent took advantage of a special offer from one of his suppliers to purchase 44,000 pounds of material at $4.10 per pound. Assume that 5,500 units were produced and 34,100 pounds of material were used. Calculate the variances of the materials. Comment on the purchasing agent's decision to accept the special offer.

2) Calculate labor variations in the following situation:

Actual direct labor payroll (51,600 hours at $18)	$ 928,800
Standard direct labor allowed per unit (4.20 hours at $19.20)	$ 80,64
Production per month (in units)	10,000

Answer rating: 100% (QA)

1 Material Variances a Direct Materials Price Variance bash Actual Quantity Purchased Actual Price S... View the full answer