Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.Direct materials (15 lbs. @ $3 per lb.)Direct labor (3 hrs. @ $14 per hr.)$4542During June the company incurred the following actual costs to produce 8,500 units.Direct materials (130,300 lbs. @ $2.80 per lb.)Direct labor (30,500 hrs. @ $14.20 per hr.).$364,840433,100AH = Actual Hours%3DSH = Standard HoursAR = Actual RateSR = Standard RateAQ = Actual QuantitySQ = Standard QuantityAP = Actual PriceSP = Standard Price(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable,unfavorable, and no variance.)(2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selectingfor favorable, unfavorable, and no variance.)Complete this question by entering your answers in the tabs below.Required 1Required 2Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. SP = Standard Price(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable,unfavorable, and no variance.)(2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selectingfor favorable, unfavorable, and no variance.)Complete this question by entering your answers in the tabs below.Required 1Required 2Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable.Actual CostStandard Cost< Required 1Required 2 >

Name: Reed Corp. has set the following standard direct materials and direct
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Description: Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.Direct materials (15 lbs. @ $3 per lb.)Direct labor (3 hrs. @ $14 per hr.)$4542During June the company incurred the following

Solution: Direct material quantity variance is also called as direct material usage or efficiency…

Business

Accounting

(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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please solve and show full work with steps for better understanding Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
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