Raymond Company makes leather chairs. Each chair should use 4 yards of chair of leather (standard quantity), and the standard price of leather is $6.00 per yard. During August, Raymond Company purchased 760 yards of leather costing $5.90 per yard and used the leather to produce 180 chairs. At the Raymond Company, each chair requires 2.4 standard direct labour hours, and the standard direct labour rate is $8.50 per hour. During August,450 direct labour were used to make 180 chairs at an average pay rate of $9.20 per hour. Calculate 1) Direct Material price variance. 2) Direct Material usage or quantity variance. 3) Direct labour rate variance.
Raymond Company makes leather chairs. Each chair should use 4 yards of chair of leather (standard quantity), and the standard price of leather is $6.00 per yard. During August, Raymond Company purchased 760 yards of leather costing $5.90 per yard and used the leather to produce 180 chairs. At the Raymond Company, each chair requires 2.4 standard direct labour hours, and the standard direct labour rate is $8.50 per hour. During August,450 direct labour were used to make 180 chairs at an average pay rate of $9.20 per hour.
Calculate 1) Direct Material price variance.
2) Direct Material usage or quantity variance.
3) Direct labour rate variance.
4) Direct labour efficiency variance.
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