calculating price and usage variances for each type of material and for labor. RDI Products Co. manufactures

calculating price and usage variances for each type of material and for labor.

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RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb... Plastic-1.0 lb @ $.38 per lb.. Production labor-3 hr @ $8.00 per hr Factory overhead. Total... During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb.. $.08 38 2.40 84 $3.70 Plastic-Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb Production labor-2,700 hr@ $8.60 per hr Factory overhead.. Costs charged to production... $ 760 2,280 1,330 23,220 7,140 $34,730 RDI Products Co. manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials: Aluminum-2 lb @ $.40 per lb... Plastic-1.0 lb @ $.38 per lb.. Production labor-3 hr @ $8.00 per hr Factory overhead. Total... During February, RDI Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900 lb @ $.40 per lb.. $.08 38 2.40 84 $3.70 Plastic-Regular grade-6,000 lb @ $.38 per lb Low grade-3,500 lb @ $.38 per lb Production labor-2,700 hr@ $8.60 per hr Factory overhead.. Costs charged to production... $ 760 2,280 1,330 23,220 7,140 $34,730

Answer rating: 100% (QA)

ANSWER To calculate the variances we will use the following formulas Materials Price Variance Actual Price Standard Price x Actual Quantity Purchased ... View the full answer