Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (10 lbs. @ $3 per lb.) . $30 Direct labor (2 hrs. @ $12 per hr.) . $24 During June the company incurred the following actual costs to produce 9,000 units. Direct materials (92,000 lbs. @ $2.95 per lb.). $271,400 Direct labor (18,800 hrs. @ $12.05 per hr.). $226,540 Compute the (1) direct materials price and quantity variances and (2) direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.

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

Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it
manufactures. Direct materials (10 lbs. @ $3 per lb.) . $30 Direct labor (2 hrs. @ $12 per hr.) . $24 During June the company incurred the following actual costs to produce 9,000 units. Direct materials (92,000 lbs. @ $2.95 per lb.). $271,400 Direct labor (18,800 hrs. @ $12.05 per hr.). $226,540 Compute the (1) direct materials price and quantity variances and (2) direct labor rate and efficiency variances.
Indicate whether each variance is favorable or unfavorable.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 4 images

Blurred answer
Knowledge Booster
Costing Systems
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
  • SEE MORE 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