Smith Company has the following standards to produce one unit of finished product. Direct materials: 3...

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Smith Company has the following standards to produce one unit of finished product. Direct materials: 3 pounds at $4 per pound Direct Labor: 4 hours at $20 per hour The Smith Company produced 5,000 products during the period. Direct material used in production equals 14,800 lbs. The direct labor workers worked 20,300 hours. Required: Calculate the direct material quantity variance and the direct labor efficiency variance. Indicate if each is favorable or unfavorable. Smith Company has the following standards to produce one unit of finished product. Direct materials: 3 pounds at $4 per pound Direct Labor: 4 hours at $20 per hour The Smith Company produced 5,000 products during the period. Direct material used in production equals 14,800 lbs. The direct labor workers worked 20,300 hours. Required: Calculate the direct material quantity variance and the direct labor efficiency variance. Indicate if each is favorable or unfavorable.

Answer rating: 100% (QA)

Solution Material quantity variance 80000 FavourableF Labor Efficiency vari... View the full answer