Part of your company’s accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round "per unit" answer values to 2 decimal places.) Direct Labor Direct Material Standard price or rate price per unit of input ? per unit $7.00 per lb Standard Quantity per unit of output ? hours per unit 6.40 lbs per unit Actual quantity used per unit of output $1.80 hours 6.80 lbs per unit Actual price or rate per unit $11 per hour $6.00 per lb Actual Output 5,000 units 5,000 units Direct-material price variance     $34,000 F Direct-material quantity variance     $14,000 U Total direct-material variance     $20,000 F Direct-labor rate variance $9,000 U     Direct-labor efficiency variance $10,000 F     Total direct-labor variance $1,000 F

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

Part of your company’s accounting database was destroyed when Godzilla attacked the city. You have been able to gather the following data from your files. Reconstruct the remaining information using the available data. All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round "per unit" answer values to 2 decimal places.)

Direct Labor Direct Material
Standard price or rate price per unit of input ? per unit $7.00 per lb
Standard Quantity per unit of output ? hours per unit 6.40 lbs per unit
Actual quantity used per unit of output $1.80 hours 6.80 lbs per unit
Actual price or rate per unit $11 per hour $6.00 per lb
Actual Output 5,000 units 5,000 units
Direct-material price variance     $34,000 F
Direct-material quantity variance     $14,000 U
Total direct-material variance     $20,000 F
Direct-labor rate variance $9,000 U    
Direct-labor efficiency variance $10,000 F    
Total direct-labor variance $1,000 F  

 

Expert Solution
Step 1 Introduction

The variance is the difference between standard output and actual output of the production.

Direct labor rate variance = (SR -AR) * AH

Direct labor efficiency variance = (SH - AH) * SR

 

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
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.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education