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(a) Calculate the material price variance (b) Calculate the material quantity variance (c) Calculate the labor rate variance (d) Calculate the labor efficiency (hourly) variance

(a) Calculate the material price variance (b) Calculate the material quantity variance (c) Calculate the labor rate variance (d) Calculate the labor efficiency (hourly) variance

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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Use the following standard cost and actual information to calculate the cost of 1 gallon of ice cream to answer the questions below. Product: Gallon of Ice Cream Manufacturing Standard Standard Cost Cost per Unit $1.00 per quart $38.00 per hour Cost Information Quantity 6 quarts Summary Direct Materials $6.00 Direct Labor 3 minutes $1.90 Total Direct Costs $7.90 Actual costs incurred to make 50 gallons of ice cream: • 275 quarts of cream at $1.05 per gallon • 165 minutes of labor at $37.00 per hour (60 minutes = 1 hour) (a) Calculate the material price variance (b) Calculate the material quantity variance (c) Calculate the labor rate variance (d) Calculate the labor efficiency (hourly) variance
Transcribed Image Text:Use the following standard cost and actual information to calculate the cost of 1 gallon of ice cream to answer the questions below. Product: Gallon of Ice Cream Manufacturing Standard Standard Cost Cost per Unit $1.00 per quart $38.00 per hour Cost Information Quantity 6 quarts Summary Direct Materials $6.00 Direct Labor 3 minutes $1.90 Total Direct Costs $7.90 Actual costs incurred to make 50 gallons of ice cream: • 275 quarts of cream at $1.05 per gallon • 165 minutes of labor at $37.00 per hour (60 minutes = 1 hour) (a) Calculate the material price variance (b) Calculate the material quantity variance (c) Calculate the labor rate variance (d) Calculate the labor efficiency (hourly) variance
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