PR 23-1A Direct materials and direct labor variance analysis OBJ. 2, 3 Abbeville Company manufactures faucets in a small manufacturing facility.. The faucets are made from brass. Manufacturing has 90 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Standard wage per hour Standard labor time per faucet Standard number of lbs. of brass Standard price per lb. of brass Actual price per lb. of brass Actual lbs. of brass used during the week Number of faucets produced during the week Actual wage per hour Actual hours for the week $15.00 40 minutes 3 lbs. $2.40 $2.50 14,350 lbs. 4,800 $14.40 3,240 hours Instructions Determine (a) the standard cost per unit for direct materials and direct labor; (b) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; and (c) the direct labor rate variance, direct labor time variance, and the total direct labor cost variance.
PR 23-1A Direct materials and direct labor variance analysis OBJ. 2, 3 Abbeville Company manufactures faucets in a small manufacturing facility.. The faucets are made from brass. Manufacturing has 90 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows: Standard wage per hour Standard labor time per faucet Standard number of lbs. of brass Standard price per lb. of brass Actual price per lb. of brass Actual lbs. of brass used during the week Number of faucets produced during the week Actual wage per hour Actual hours for the week $15.00 40 minutes 3 lbs. $2.40 $2.50 14,350 lbs. 4,800 $14.40 3,240 hours Instructions Determine (a) the standard cost per unit for direct materials and direct labor; (b) the direct materials price variance, direct materials quantity variance, and total direct materials cost variance; and (c) the direct labor rate variance, direct labor time variance, and the total direct labor cost variance.
Chapter1: Financial Statements And Business Decisions
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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:PR 23-1A Direct materials and direct labor variance analysis
OBJ. 2, 3
Abbeville Company manufactures faucets in a small manufacturing facility.. The faucets are
made from brass. Manufacturing has 90 employees. Each employee presently provides 36
hours of labor per week. Information about a production week is as follows:
Standard wage per hour
Standard labor time per faucet
Standard number of lbs. of brass
Standard price per lb. of brass
Actual price per lb. of brass
Actual lbs. of brass used during the week
Number of faucets produced during the week
Actual wage per hour
Actual hours for the week
$15.00
40 minutes
3 lbs.
$2.40
$2.50
14,350 lbs.
4,800
$14.40
3,240 hours
Instructions
Determine (a) the standard cost per unit for direct materials and direct labor; (b) the direct
materials price variance, direct materials quantity variance, and total direct materials cost
variance; and (c) the direct labor rate variance, direct labor time variance, and the total direct
labor cost variance.
Transcribed Image Text:Problem 23-1A
a.
b.
C.
Standard Cost per Unit
for Direct Materials and Direct Labor
Direct Materials Price Variance
Direct Materials Quantity Variance
Total Direct Materials Cost Variance
Direct Labor Rate Variance
Direct Labor (Time) Efficiency Variance
Total Direct Labor Cost Variance
THE
Wrong
Wrong
Wrong
Wrong
Wrong
Wrong
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