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3) Molino Company produces ponchos. The company has established the following direct material and direct labor standards for one poncho. Wool (3 yds. @3.00) 9.00 labor ( 3.5 hrs. @ $5.00) 17.50 Total Prime cost 26.50 During the first quarter of the year. Molino produced 25,000 ponchos. The company purchased and used 78,200 yards of wool at $2.90 per yard. Actual direct labor used was 90,000 hours at $5.20 per hour. A) Calculate the direct material price and usage variances. B) Calculate the direct labor rate and efficiency variances.

3) Molino Company produces ponchos. The company has established the following direct material and direct labor standards for one poncho. Wool (3 yds. @3.00) 9.00 labor ( 3.5 hrs. @ $5.00) 17.50 Total Prime cost 26.50 During the first quarter of the year. Molino produced 25,000 ponchos. The company purchased and used 78,200 yards of wool at $2.90 per yard. Actual direct labor used was 90,000 hours at $5.20 per hour. A) Calculate the direct material price and usage variances. B) Calculate the direct labor rate and efficiency variances.

FINANCIAL ACCOUNTING
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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3) Molino Company produces ponchos. The company has established the following direct material and direct labor standards for one poncho. ( 3 yds. @3.00) ( 3.5 hrs. @ $5.00) Wool 9.00 labor 17.50 Total Prime cost 26.50 During the first quarter of the year. Molino produced 25,000 ponchos. The company purchased and used 78,200 yards of wool at $2.90 per yard. Actual direct labor used was 90,000 hours at $5.20 per hour. A) Calculate the direct material price and usage variances. B) Calculate the direct labor rate and efficiency variances.
Transcribed Image Text:3) Molino Company produces ponchos. The company has established the following direct material and direct labor standards for one poncho. ( 3 yds. @3.00) ( 3.5 hrs. @ $5.00) Wool 9.00 labor 17.50 Total Prime cost 26.50 During the first quarter of the year. Molino produced 25,000 ponchos. The company purchased and used 78,200 yards of wool at $2.90 per yard. Actual direct labor used was 90,000 hours at $5.20 per hour. A) Calculate the direct material price and usage variances. B) Calculate the direct labor rate and efficiency variances.
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