Part of your company’s accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Hint: It is helpful to solve for the unknowns in the order indicated by the letters in the following table.) Direct LaborDirect MaterialStandard price or rate per unit of input$8 per poundeStandard quantity per unit of outputfActual quantity used per unit of output .3.5 hoursaActual price or rate per unit of input$21 per hour$7 per poundActual output .10,000 units10,000 unitsDirect-material price variance$30,000 FDirect-material quantity variancebTotal direct-material variance$10,000 FDirect-labor rate varianced.Direct-labor efficiency variance$100,000 FTotal direct-labor variance$ 65,000 F

The variation between actual results and the budget or standard is referred as variance.

Answered: Direct Labor Direct Material Standard…

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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Part of your company’s accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Hint: It is helpful to solve for the unknowns in the order indicated by the letters in the following table.)

Direct Labor
Direct Material
Standard price or rate per unit of input
$8 per pound
e
Standard quantity per unit of output
f
Actual quantity used per unit of output .
3.5 hours
a
Actual price or rate per unit of input
$21 per hour
$7 per pound
Actual output .
10,000 units
10,000 units
Direct-material price variance
$30,000 F
Direct-material quantity variance
b
Total direct-material variance
$10,000 F
Direct-labor rate variance
d.
Direct-labor efficiency variance
$100,000 F
Total direct-labor variance
$ 65,000 F

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