Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given...

 
 

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Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,475 pounds of aluminum to manufacture 925 units. The company paid $29.00 per pound during the month to purchase aluminum. At the beginning of the month, the company had 55 pounds of aluminum on hand. At the end of the month, the company had only 35 pounds of aluminum in its warehouse. Schmidt used 4,450 direct labor hours during the month, at an average cost of $42.00 per hour. Required: Compute the following variances for the month: 1. The purchase price variance for aluminum. Indicate whether this variance is favorable or unfavorable. 2. The usage variance for aluminum. Indicate whether this variance is favorable or unfavorable. 3. The direct labor rate variance. Indicate whether this variance is favorable or unfavorable. 4. The direct labor efficiency variance. Indicate whether this variance is favorable or unfavorable. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) 1. Purchase-price variance 2. Usage variance 3. Direct labor rate variance 4. Efficiency variance $ 13,820 Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,475 pounds of aluminum to manufacture 925 units. The company paid $29.00 per pound during the month to purchase aluminum. At the beginning of the month, the company had 55 pounds of aluminum on hand. At the end of the month, the company had only 35 pounds of aluminum in its warehouse. Schmidt used 4,450 direct labor hours during the month, at an average cost of $42.00 per hour. Required: Compute the following variances for the month: 1. The purchase price variance for aluminum. Indicate whether this variance is favorable or unfavorable. 2. The usage variance for aluminum. Indicate whether this variance is favorable or unfavorable. 3. The direct labor rate variance. Indicate whether this variance is favorable or unfavorable. 4. The direct labor efficiency variance. Indicate whether this variance is favorable or unfavorable. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) 1. Purchase-price variance 2. Usage variance 3. Direct labor rate variance 4. Efficiency variance $ 13,820

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To calculate the variances well use the standard cost information provided in Exhibit 145 Standard c... View the full answer