Below are the standard prime costs for one unit of the XYZ product:

Direct materials (4 pounds @ $6 per pound)

Direct labor (2 hours @ $14 per hour)

Total Prime cost

$24.00

28.00

$52.00

The actual results for the year are as follows:

Units produced

Material purchased

Material used

Direct labor

400,000

1,700,000 pounds @ $5.75 per pound

1,680,000 pounds

780,000 hours @ $14.30 per hour

Required:

1. Compute the material price and material use (quantity) variances for the year.
2. Compute the labor rate and labor efficiency variances for the year.
3. Compute the per unit actual prime cost for the period.

Answer rating: 100% (QA)

To calculate the material price variance and material quantity variance for the year we can use the ... View the full answer