Ferry Co. uses a standard cost system to account for the costs of its production of...
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Ferry Co. uses a standard cost system to account for the costs of its production of small boats. Standards are 1.4 meters of materials at $105 per meter and 10 hours of labor at a standard wage rate of $12. During September, Ferry Co. produced 2,600 boats. Ferry Co. purchased and used a total of 3,560 meters of materials at a total cost of $381,180. Payroll totaled $302,730 for 25,430 hours worked. Calculate the following variances. i. direct materials price variance ii. direct materials quantity variance iii. direct materials total (spending) variance iv. direct labor rate variance v. direct labor efficiency variance vi. direct labor total (spending) variance Ferry Co. uses a standard cost system to account for the costs of its production of small boats. Standards are 1.4 meters of materials at $105 per meter and 10 hours of labor at a standard wage rate of $12. During September, Ferry Co. produced 2,600 boats. Ferry Co. purchased and used a total of 3,560 meters of materials at a total cost of $381,180. Payroll totaled $302,730 for 25,430 hours worked. Calculate the following variances. i. direct materials price variance ii. direct materials quantity variance iii. direct materials total (spending) variance iv. direct labor rate variance v. direct labor efficiency variance vi. direct labor total (spending) variance
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To calculate the variances we need to compare the actual costs and quantities with the standard costs and quantities Given Standard materials cost per ... View the full answer
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