Orion Corporation has established the following standards for the prime costs of one unit of its chief product, dartboards. Direct material Direct labor Total Standard Quantity 13.00 pounds 2.10 hour Standard Price or Rate $ 2.90 per pound $ 14.00 per hour Standard Cost $ 37.70 29.40 $ 67.10 During June, Orion purchased 263,000 pounds of direct material at a total cost of $810,040. The total wages for June were $600,300, 90 percent of which were for direct labor. Orion manufactured 18,000 dartboards during June, using 225,000 pounds of the direct material purchased in June and 41,400 direct-labor hours. Required: Compute the following variances for June. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). > Answer is complete but not entirely correct. 1. Direct-material price variance $47,340 Unfavorable 2. Direct-material quantity variance $26,100 Favorable 3. Direct-material purchase price variance $47,340 Unfavorable 4. Direct-labor rate variance 5. Direct-labor efficiency variance $20,700 Favorable $50,400 Unfavorable
Orion Corporation has established the following standards for the prime costs of one unit of its chief product, dartboards. Direct material Direct labor Total Standard Quantity 13.00 pounds 2.10 hour Standard Price or Rate $ 2.90 per pound $ 14.00 per hour Standard Cost $ 37.70 29.40 $ 67.10 During June, Orion purchased 263,000 pounds of direct material at a total cost of $810,040. The total wages for June were $600,300, 90 percent of which were for direct labor. Orion manufactured 18,000 dartboards during June, using 225,000 pounds of the direct material purchased in June and 41,400 direct-labor hours. Required: Compute the following variances for June. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). > Answer is complete but not entirely correct. 1. Direct-material price variance $47,340 Unfavorable 2. Direct-material quantity variance $26,100 Favorable 3. Direct-material purchase price variance $47,340 Unfavorable 4. Direct-labor rate variance 5. Direct-labor efficiency variance $20,700 Favorable $50,400 Unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Orion Corporation has established the following standards for the prime costs of one unit of its chief product, dartboards.
Direct material
Direct labor
Total
Standard Quantity
13.00 pounds
2.10 hour
Standard Price or Rate
$ 2.90 per pound
$ 14.00 per hour
Standard Cost
$ 37.70
29.40
$ 67.10
During June, Orion purchased 263,000 pounds of direct material at a total cost of $810,040. The total wages for June were $600,300,
90 percent of which were for direct labor. Orion manufactured 18,000 dartboards during June, using 225,000 pounds of the direct
material purchased in June and 41,400 direct-labor hours.
Required:
Compute the following variances for June.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable".
Select "None" and enter "O" for no effect (i.e., zero variance).
> Answer is complete but not entirely correct.
1. Direct-material price variance
$47,340
Unfavorable
2. Direct-material quantity variance
$26,100
Favorable
3. Direct-material purchase price variance
$47,340 Unfavorable
4. Direct-labor rate variance
5. Direct-labor efficiency variance
$20,700 Favorable
$50,400 Unfavorable
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