Perez Company adopted a standard cost system several years ago. The standard costs for the prime costs
Question:
Perez Company adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: Material: 10 kilograms @ $4.50 per kilogram $45.00 Labor: 6 hours @ $8.50 per hour $51.00
(1) Units completed: 5,800 units
(2) Budgeted output: 6,000 units
(3) Materials purchased and used: 60,000 kilograms
(4) Total actual labor costs: $306,600
(5) Actual hours of labor: 36,500 hours
(6) Materials quantity variance: $2,250 unfavorable
(7) Net materials variance: $450 unfavorable
Compute the following:
a. Labor rate variance
b. Labor efficiency variance
c. Actual kilograms of material used in the production process
d. Actual cost paid per kilogram of material
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins