eBook

Show Me How

Question Content Area

Direct Materials and Direct Labor Variance Analysis

Abbeville Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 90 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Standard wage per hr.	$15.00
Standard labor time per faucet	40 min.
Standard number of lbs. of brass	3 lbs.
Standard price per lb. of brass	$2.40
Actual price per lb. of brass	$2.50
Actual lbs. of brass used during the week	14,350 lbs.
Number of faucets produced during the week	4,800
Actual wage per hr.	$14.40
Actual hrs. for the week (90 employees 36 hours)	3,240 hrs.

Required:

a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

Direct materials standard cost per unit	$fill in the blank 1
Direct labor standard cost per unit	$fill in the blank 2
Total standard cost per unit	$fill in the blank 3

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance	$fill in the blank 4	FavorableUnfavorable
Direct Materials Quantity Variance	$fill in the blank 6	FavorableUnfavorable
Total Direct Materials Cost Variance	$fill in the blank 8	FavorableUnfavorable

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Labor Rate Variance	$fill in the blank 10	FavorableUnfavorable
Direct Labor Time Variance	$fill in the blank 12	FavorableUnfavorable
Total Direct Labor Cost Variance	$fill in the blank 14	FavorableUnfavorable