Direct Materials and Direct Labor Variance Analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Line Item Description Value Standard number of yds. of fabric per unit 5.0 yds. Standard price per yd. of fabric $5.00 Standard wage per hr. Standard labor time per unit $12.00 12 min. Actual price per yd. of fabric $5.10 Actual yds, of fabric used during the week 26,200 yds. Number of units produced during the week 5,220 $11.80 1,000 hrs. Actual wage per hr. Actual hrs. for the wook Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Line Item Description Cost per Unit Direct materials standard cost per unit Sfill in the blank 1. Direct labor standard cost per unit Sfill in the blank 2 Sfill in the blank 3 Total standard cost per unit b. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Amount Variance Line Item Description Sfill in the blank 4 FavorableUnfavorable Price variance Quantity variance Sfill in the blank 6 FavorableUnfavorable Total direct materials cost variance Sfill in the blank 8 FavorableUnfavorable c. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Amount Variance Line Item Description Sfill in the blank 10 FavorableUnfavorable Rate variance Time variance Sfill in the blank 12 FavorableUnfavorable Total direct labor cost variance Sfill in the blank 14 FavorableUnfavorable
Direct Materials and Direct Labor Variance Analysis Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows: Line Item Description Value Standard number of yds. of fabric per unit 5.0 yds. Standard price per yd. of fabric $5.00 Standard wage per hr. Standard labor time per unit $12.00 12 min. Actual price per yd. of fabric $5.10 Actual yds, of fabric used during the week 26,200 yds. Number of units produced during the week 5,220 $11.80 1,000 hrs. Actual wage per hr. Actual hrs. for the wook Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Line Item Description Cost per Unit Direct materials standard cost per unit Sfill in the blank 1. Direct labor standard cost per unit Sfill in the blank 2 Sfill in the blank 3 Total standard cost per unit b. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Amount Variance Line Item Description Sfill in the blank 4 FavorableUnfavorable Price variance Quantity variance Sfill in the blank 6 FavorableUnfavorable Total direct materials cost variance Sfill in the blank 8 FavorableUnfavorable c. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Amount Variance Line Item Description Sfill in the blank 10 FavorableUnfavorable Rate variance Time variance Sfill in the blank 12 FavorableUnfavorable Total direct labor cost variance Sfill in the blank 14 FavorableUnfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Direct Materials and Direct Labor Variance Analysis
Lenni Clothing Co. manufactures clothing in a small manufacturing facility. Manufacturing has 25 employees. Each employee presently provides 40 hours of productive labor per week. Information about a production week is as follows:
Line Item Description
Value
Standard number of yds. of fabric per unit 5.0 yds.
Standard price per yd. of fabric
$5.00
$12.00
Standard wage per hr.
Standard labor time per unit
12 min.
Actual price per yd. of fabric
$5.10
Actual yds. of fabric used during the week 26,200 yds.
Number of units produced during the week 5,220
Actual wage per hr.
$11.80
1,000 hrs.
Actual hrs. for the week
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
Line Item Description
Cost per Unit
Direct materials standard cost per unit Sfill in the blank 1
Direct labor standard cost per unit
Sfill in the blank 2
Sfill in the blank 3
Total standard cost per unit
b. Determine the price variance, quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Amount
Variance
Line Item Description
Sfill in the blank 4 FavorableUnfavorable
Price variance
Quantity variance
Sfill in the blank 6 FavorableUnfavorable
Sfill in the blank 8 FavorableUnfavorable
Total direct materials cost variance
c. Determine the rate variance, time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Line Item Description
Amount
Variance
Rate variance
Sfill in the blank 10 FavorableUnfavorable
Time variance
Sfill in the blank 12 FavorableUnfavorable
Total direct labor cost variance Sfill in the blank 14 FavorableUnfavorable
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