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Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbs. @ $4 per lb.) Direct labor (2 hrs. @ $16 per hr.) During June the company incurred the following actual costs to produce 8,900 units. $64 32 Direct materials (145,200 lbs. @ $3.70 per lb.) Direct labor (21,000 hrs. @ $16.15 per hr.). AH Actual Hours SH Standard Hours AR= Actual Rate SR Standard Rate AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP Standard Price $537,240 339, 150 (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbs. @ $4 per lb.) Direct labor (2 hrs. @ $16 per hr.) During June the company incurred the following actual costs to produce 8,900 units. $64 32 Direct materials (145,200 lbs. @ $3.70 per lb.) Direct labor (21,000 hrs. @ $16.15 per hr.). AH Actual Hours SH Standard Hours AR= Actual Rate SR Standard Rate AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP Standard Price $537,240 339, 150 (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbs. @ $4 per lb.) Direct labor (2 hrs. @ $16 per hr.) During June the company incurred the following actual costs to produce 8,900 units. Direct materials (145,200 lbs. @ $3.70 per lb.) Direct labor (21,000 hrs. @ $16.15 per hr.). AH = Actual Hours SH Standard Hours AR = Actual Rate SR Standard Rate = $64 32 = AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price $537,240 339, 150 (1) Compute the direct materials price and quantity variances. (Indicate the effect of each riance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
Transcribed Image Text:Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (16 lbs. @ $4 per lb.) Direct labor (2 hrs. @ $16 per hr.) During June the company incurred the following actual costs to produce 8,900 units. Direct materials (145,200 lbs. @ $3.70 per lb.) Direct labor (21,000 hrs. @ $16.15 per hr.). AH = Actual Hours SH Standard Hours AR = Actual Rate SR Standard Rate = $64 32 = AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price $537,240 339, 150 (1) Compute the direct materials price and quantity variances. (Indicate the effect of each riance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.)
(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Indicate whether each variance is favorable or unfavorable. Standard Cost Actual Cost < Required 1 WWWTHE (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Required 1 Required 2 (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Actual Cost Required 2 > Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. < Required 1 Required 2 Standard Cost
Transcribed Image Text:(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the direct materials price and quantity variances. Indicate whether each variance is favorable or unfavorable. Standard Cost Actual Cost < Required 1 WWWTHE (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Required 1 Required 2 (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Complete this question by entering your answers in the tabs below. Actual Cost Required 2 > Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. < Required 1 Required 2 Standard Cost
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