Chemical Incorporated. has set the following standards for direct materials and direct labor for each 20-pound bag of Weed-Be-Doom: Per Bag $ 6.00 6.30 Direct materials: 25 pounds XF-2000 @ $0.24/pound Direct labor: 0.21 hour @ $38/hour The firm manufactured 100,000 bags of Weed-Be-Doom in December and used 2,700,000 pounds of XF-2000 and 21,405 direct labor hours. During the month, the firm purchased 3,000,000 pounds of XF-2000 at $0.155 per pound and incurred a total payroll of $749,175 for direct labor. The firm records purchases at standard cost and therefore recognizes the direct materials price variance at point of purchase. Required: aterials and the rate and efficiency variances for direct labor.
Chemical Incorporated. has set the following standards for direct materials and direct labor for each 20-pound bag of Weed-Be-Doom: Per Bag $ 6.00 6.30 Direct materials: 25 pounds XF-2000 @ $0.24/pound Direct labor: 0.21 hour @ $38/hour The firm manufactured 100,000 bags of Weed-Be-Doom in December and used 2,700,000 pounds of XF-2000 and 21,405 direct labor hours. During the month, the firm purchased 3,000,000 pounds of XF-2000 at $0.155 per pound and incurred a total payroll of $749,175 for direct labor. The firm records purchases at standard cost and therefore recognizes the direct materials price variance at point of purchase. Required: aterials and the rate and efficiency variances for direct labor.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the price and usage variances for direct materials and the rate and efficiency variances for direct labor.
Direct materials:
Purchase-price variance
Usage variance
Direct labor:
Rate variance
Efficiency variance
<Required 1
Required 2 >
Transcribed Image Text:Chemical Incorporated. has set the following standards for direct materials and direct labor for each 20-pound bag of Weed-Be-Doom:
Per Bag
Direct materials: 25 pounds XF-2000 @ $0.24/pound
Direct labor: 0.21 hour @ $30/hour
$ 6.00
6.30
The firm manufactured 100,000 bags of Weed-Be-Doom in December and used 2,700,000 pounds of XF-2000 and 21,405 direct
labor hours. During the month, the firm purchased 3,000,000 pounds of XF-2000 at $0.155 per pound and incurred a total payroll of
$749,175 for direct labor. The firm records purchases at standard cost and therefore recognizes the direct materials price variance at
point of purchase.
Required:
1. Compute the price and usage variances for direct materials and the rate and efficiency variances for direct labor.
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