Lucia Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (15 pounds @ $4 per pound) Direct labor (3 hours @ $15 per hour) During May the company incurred the following actual costs to produce 8,400 units. Direct materials (129,500 pounds @ $3.80 per pound) Direct labor (28,600 hours @ $15.10 per hour) AR = Actual Rate SR Standard Rate AQ Actual Quantity SQ Standard Quantity AP = Actual Price SP = Standard Price $ 60 45 $ 492,100 431,860 (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance.
Lucia Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (15 pounds @ $4 per pound) Direct labor (3 hours @ $15 per hour) During May the company incurred the following actual costs to produce 8,400 units. Direct materials (129,500 pounds @ $3.80 per pound) Direct labor (28,600 hours @ $15.10 per hour) AR = Actual Rate SR Standard Rate AQ Actual Quantity SQ Standard Quantity AP = Actual Price SP = Standard Price $ 60 45 $ 492,100 431,860 (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:Required 1
Required 2
Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)
Actual Cost
Required 1 Required 2
$
0
Compute the direct labor rate varlance and the direct labor efficiency variance. (Indicate the effect each variance by selecting favorable, unfavorable, or no
variance. Round "Rate per hour" answers to 2 decimal places.)
Actual Cost
$
0
< Required 1
0
$
Required 2 >
0
Standard Cost
Standard Cost
Transcribed Image Text:Lucia Company has set the following standard cost per unit for direct materials and direct labor.
Direct materials (15 pounds @ $4 per pound)
Direct labor (3 hours@ $15 per hour)
During May the company incurred the following actual costs to produce 8,400 units.
Direct materials (129,500 pounds @ $3.80 per pound)
Direct labor (28,600 hours @ $15.10 per hour)
AR = Actual Rate
SR Standard Rate
AQ = Actual Quantity
SQ Standard Quantity
AP = Actual Price
SP = Standard Price
$ 60
45
$ 492,100
431,860
(1) Compute the direct materials price and quantity variances.
(2) Compute the direct labor rate variance and the direct labor efficiency variance.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education