Direct-material price variance Direct-material quantity variance Direct-material purchase price variance
Direct-material price variance Direct-material quantity variance Direct-material purchase price variance
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 10E: Ada Clothes Company produced 40,000 units during April. The Cutting Department used 12,800 direct...
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Question
Please explain the calculations!!
The left blank column is for a number, the right blank column is to label it favorable, unfavorable, or none.
![During June, Danby Company's material purchases amounted to 7,300 pounds
at a price of $7.80 per pound. Actual costs incurred in the production of 2,000
units were as follows:
Direct labor:
$113,750 ($18.20 per hour)
Direct material: $36,660 ($7.80 per pound)
The standards for one unit of Danby Company's product are as follows:
Direct Labor:
Quantity, 3 hours per unit
Rate, $18.10 per hour
Direct Material:
Quantity, 2 pounds per unit
Price, $7.50 per pound
Required:
Compute the direct-material price and quantity variances, the direct-material
purchase price variance, and the direct-labor rate and efficiency variances.
(Indicate the effect of each variance by selecting "Favorable" or
"Unfavorable". Select "None" and enter "0" for no effect (i.e., zero
variance).)
Direct-material price variance
Direct-material quantity variance
Direct-material purchase price variance
Direct-labor rate variance
Direct-labor efficiency variance
Favorable
Unfavorable
None](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F506c3f2a-e371-4ce1-aa8d-cf5301d8204a%2F105af69e-0d19-4366-a133-7121b38066b2%2F7c7vizm_processed.png&w=3840&q=75)
Transcribed Image Text:During June, Danby Company's material purchases amounted to 7,300 pounds
at a price of $7.80 per pound. Actual costs incurred in the production of 2,000
units were as follows:
Direct labor:
$113,750 ($18.20 per hour)
Direct material: $36,660 ($7.80 per pound)
The standards for one unit of Danby Company's product are as follows:
Direct Labor:
Quantity, 3 hours per unit
Rate, $18.10 per hour
Direct Material:
Quantity, 2 pounds per unit
Price, $7.50 per pound
Required:
Compute the direct-material price and quantity variances, the direct-material
purchase price variance, and the direct-labor rate and efficiency variances.
(Indicate the effect of each variance by selecting "Favorable" or
"Unfavorable". Select "None" and enter "0" for no effect (i.e., zero
variance).)
Direct-material price variance
Direct-material quantity variance
Direct-material purchase price variance
Direct-labor rate variance
Direct-labor efficiency variance
Favorable
Unfavorable
None
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