Rhodes Corporation manufactures a product with the following standard costs: Direct materials (20 yards @ $1.85 per yard) $ 37.00 Direct labor (4 hours @ $12.00 per hour) 48.00 Variable factory overhead (4 hours @ $5.40 per hour) 21.60 Fixed factory overhead (4 hours @ $3.60 per hour) 14.40 Total standard cost per unit of output $121.00 Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output). The following information pertains to the month of July: Direct materials purchased (16,000 yards @ $1.80 per yard) $28,800 Direct materials used (9,400 yards) Direct labor (1,880 hours @ $12.20 per hour) 22,936 Actual factory overhead 16,850 Actual production in July: 460 units
Rhodes Corporation manufactures a product with the following standard costs:
|
Direct materials (20 yards @ $1.85 per yard) |
$ 37.00 |
|
Direct labor (4 hours @ $12.00 per hour) |
48.00 |
|
Variable factory |
21.60 |
|
Fixed factory overhead (4 hours @ $3.60 per hour) |
14.40 |
|
Total standard cost per unit of output |
$121.00 |
Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output).
The following information pertains to the month of July:
|
Direct materials purchased (16,000 yards @ $1.80 per yard) |
$28,800 |
|
Direct materials used (9,400 yards) |
|
|
Direct labor (1,880 hours @ $12.20 per hour) |
22,936 |
|
Actual factory overhead |
16,850 |
|
Actual production in July: 460 units |
|
Using the information above, compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable:
- Materials purchase price variance
- Materials quantity variance
- Labor rate variance
- Labor efficiency variance
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