Frisco Company recently purchased 110,000 units of raw material for $594,000. Three units of raw materials are budgeted for use in each finished good manufactured, with the raw material standard set at $18.00 for each completed product. Frisco manufactured 33,305 finished units during the period just ended and used 101,037 units of raw material. If management is concerned about the timely reporting of variances in an effort to improve cost control and bottom-line performance, what would the materials purchase price variance be? Shailene Company has set labor costs at $48 per unit of output, based on 3 hours allowed to produce each finished unit. Last month, 3,000 direct labor hours were used, and 1,500 units of output were manufactured at a total cost of $72,000. Required: a. Determine the labor rate variance. b. Determine the labor efficiency variance.
Frisco Company recently purchased 110,000 units of raw material for $594,000. Three units of raw materials are budgeted for use in each finished good manufactured, with the raw material standard set at $18.00 for each completed product. Frisco manufactured 33,305 finished units during the period just ended and used 101,037 units of raw material. If management is concerned about the timely reporting of variances in an effort to improve cost control and bottom-line performance, what would the materials purchase price variance be? Shailene Company has set labor costs at $48 per unit of output, based on 3 hours allowed to produce each finished unit. Last month, 3,000 direct labor hours were used, and 1,500 units of output were manufactured at a total cost of $72,000. Required: a. Determine the labor rate variance. b. Determine the labor efficiency variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Frisco Company recently purchased 110,000
units of raw material for $594,000. Three units
of raw materials are budgeted for use in each
finished good manufactured, with the raw
material standard set at $18.00 for each
completed product.
Frisco manufactured 33,305 finished units
during the period just ended and used
101,037 units of raw material. If management
is concerned about the timely reporting of
variances in an effort to improve cost control
and bottom-line performance, what would
the materials purchase price variance be?
Shailene Company has set labor costs at $48 per
unit of output, based on 3 hours allowed to
produce each finished unit. Last month, 3,000
direct labor hours were used, and 1,500 units of
output were manufactured at a total cost of
$72,000.
Required:
a. Determine the labor rate variance.
b. Determine the labor efficiency variance.
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