Chapter $23$ Practice Problem #$3$

Direct Materials & Direct Labor Variances

New Company produces Deaceful Widgets that are designed to increase relaxation. The company has established the below standard costs:

$\backslash$table$[[,$Standard Quantity,Standard Price$/$Rate$],[$Direct Materials,$23\mathrm{.}5$ pounds,$$5$ per pound$],[$Direct Labor,$1\mathrm{.}95$ hours,$$20$ per hour$]]$

During March, New Company used $1,150,000$ pounds of direct materials to produce $50,000$ Deaceful Widgets. The total price paid for materials was $$7,868,421\mathrm{.}05,95\%$ of which were for direct materials. The total wages for March were $$2,406,250,80\%$ of which were for direct labor. The actual direct labor hours for the month were $100,000.$

Required: Important $-$ to avoid rounding errors $-$ round your answers to $2$ decimal points. For example: $10\mathrm{.}456789$ should be rounded to $10\mathrm{.}46(P_{\text{o}\text{i}\text{n}\text{t}\text{s}}$ will be deducted for not following directions$).$

Directions: To receive credit for this assignment, students must include the formulas and calculations required to answer the questions.

Calculate the Total Standard cost per unit for the Peaceful Widgets

Calculate the Total Direct Materials Variance

Calculate the Total Direct Labor Variance