A company produces a chemical compound that can be sold for industrial use. The direct materials and direct labor standards for unit of the product are given below: Standard Quantity or Hours 7.00 pounds 0.45 hours Standard Price Standard or Rate $2.20 per pound $7.00 per hour Cost Direct materials $15.40 $ 3.15 Direct labor During the most recent month, the following activity was recorded: a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of product. c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for r effect (i.e., zero variance). Input all amounts as positive values. Round yo intermediate calculations to the nearest whole do 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance
A company produces a chemical compound that can be sold for industrial use. The direct materials and direct labor standards for unit of the product are given below: Standard Quantity or Hours 7.00 pounds 0.45 hours Standard Price Standard or Rate $2.20 per pound $7.00 per hour Cost Direct materials $15.40 $ 3.15 Direct labor During the most recent month, the following activity was recorded: a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound. b. All of the material purchased was used to produce 2,500 units of product. c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for r effect (i.e., zero variance). Input all amounts as positive values. Round yo intermediate calculations to the nearest whole do 1. Materials price variance Materials quantity variance 2. Labor rate variance Labor efficiency variance
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...
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![A company produces a chemical compound that can be sold for industrial use. The direct materials and direct labor standards for one
unit of the product are given below:
Standard
Quantity or
Hours
Standard Price
Standard
Cost
or Rate
$2.20 per pound
$7.00 per hour
Direct materials
7.00 pounds
0.45 hours
$15.40
$ 3.15
Direct labor
During the most recent month, the following activity was recorded:
a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound.
b. All of the material purchased was used to produce 2,500 units of product.
c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)
1.
Materials price variance
Materials quantity variance
2.
Labor rate variance
Labor efficiency variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F82cc8ab0-224e-4e63-b325-2c789c823e3d%2F69b50695-80a6-4345-bc54-7d414f4fc120%2Fgp31qs_processed.png&w=3840&q=75)
Transcribed Image Text:A company produces a chemical compound that can be sold for industrial use. The direct materials and direct labor standards for one
unit of the product are given below:
Standard
Quantity or
Hours
Standard Price
Standard
Cost
or Rate
$2.20 per pound
$7.00 per hour
Direct materials
7.00 pounds
0.45 hours
$15.40
$ 3.15
Direct labor
During the most recent month, the following activity was recorded:
a. 19,500.00 pounds of material were purchased at a cost of $2.10 per pound.
b. All of the material purchased was used to produce 2,500 units of product.
c. 1,025 hours of direct labor time were recorded at a total labor cost of $9,225.
Required:
1. Compute the materials price and quantity variances for the month.
2. Compute the labor rate and efficiency variances for the month.
(For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no
effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar.)
1.
Materials price variance
Materials quantity variance
2.
Labor rate variance
Labor efficiency variance
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