The Isabelina Company produces very good quality beach towels. In 20X4, it produced 450 towels during the month of March. Due to flooding, the company lost some of the information.

 

The information that could be recovered is presented below:

Direct material.

It is assumed that all direct material purchased is used in production.
Standard direct material cost, per towel is ___ yards @ $4.00 per yard.
Current total direct material cost: ___ yards at a total cost of $9,600.
Total standard cost allowed for the 450 units produced, $9,000.
Direct material price variation is $___, favorable or unfavorable?
Direct material efficiency variation is $80 unfavorable.
 

Direct labor

Standard cost: 3 hours per towel at $8.00 per hour.
Current cost per hour: $8.25.
Total current direct labor cost: $ ___.
Direct labor price/rate variation: $___.
Direct labor efficiency variation: $337.50 unfavorable.
 

 

Calculate the following:    

a. Standard cost per towel
b. Estimated standard allowed number of yards per towel.
c. Total yards actually used in production
d. Direct material price variation
e. Previous variation (of MD price, is it favorable or unfavorable?)
f. Actual hours used in the production of 450 towels.
g. Total actual direct labor cost
h. Price/rate variation of direct labor, is it favorable or unfavorable?

Answer rating: 100% (QA)

Lets calculate the required values step by step a Standard Cost per Towel Standard Direct Material Cost per Towel yards 400 per yard Standard Direct L... View the full answer