Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4 sheets of 1/2-inch steel at $110 per sheet and 14 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 600 units. Materials purchased and used totaled 2,540 sheets at a price of $106. Payroll totaled $112,256 for 8,770 hours worked. Required: a. Calculate the direct materials price variance. Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the direct materials quantity variance. Note: Indicate the effect of variance by selecting "Favorable". "Unfavorable", or "None" for no effect (i.e., zero variance). a. Price Variance b. Quantity Variance

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4 sheets of 1/2-inch steel at $110 per
sheet and 14 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 600 units. Materials purchased and
used totaled 2,540 sheets at a price of $106. Payroll totaled $112,256 for 8,770 hours worked.
Required:
a. Calculate the direct materials price variance.
Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or
"None" for no effect (i.e., zero variance).
b. Calculate the direct materials quantity variance.
Note: Indicate the effect of variance by selecting "Favorable". "Unfavorable", or "None" for no effect (i.e., zero variance).
a. Price Variance
b. Quantity Variance
Transcribed Image Text:Basil Tooling uses a standard cost system to account for the costs of its one product. Standards are 4 sheets of 1/2-inch steel at $110 per sheet and 14 hours of labor at a standard wage rate of $13. During July, Basil Tooling produced 600 units. Materials purchased and used totaled 2,540 sheets at a price of $106. Payroll totaled $112,256 for 8,770 hours worked. Required: a. Calculate the direct materials price variance. Note: Do not round your intermediate calculations. Indicate the effect of variance by selecting "Favorable", "Unfavorable", or "None" for no effect (i.e., zero variance). b. Calculate the direct materials quantity variance. Note: Indicate the effect of variance by selecting "Favorable". "Unfavorable", or "None" for no effect (i.e., zero variance). a. Price Variance b. Quantity Variance
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