Q13. During May, Joliet Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May. Direct material purchased: 18,000 yards at $1.38 per yard $ 24,840 Direct material used: 9,500 yards at $1.38 per yard Direct labor: 2,100 hours at $9.15 per hour 13,110 19,215 The standard prime costs for one unit of Stylex are as follows:
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.
Compute the following variances for the month of May.
a. Direct-material price variance
b. Direct-material quantity variance
c. Direct-material purchase price variance
d. Direct-labor rate variance
e. Direct-labor e ciency variance
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
