Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows: Standard wage per hour $14.40 Standard labor time per unit 20 min. Standard number of Ibs. of brass 1.4 Ibs. Standard price per Ib. of brass $11.75 Actual price per Ib. of brass $12.00 Actual Ibs. of brass used during the week 10,382 Ibs. Number of units produced during the week 7,200 Actual wage per hour $14.83 Actual hours for the week (40 employees × 35 hours) 1,400 Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit 2$ Direct labor standard cost per unit Total standard cost per unit b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance 2$ Direct Materials Quantity Variance $ Total Direct Materials Cost Variance $
Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 35 hours of labor per week. Information about a production week is as follows: Standard wage per hour $14.40 Standard labor time per unit 20 min. Standard number of Ibs. of brass 1.4 Ibs. Standard price per Ib. of brass $11.75 Actual price per Ib. of brass $12.00 Actual Ibs. of brass used during the week 10,382 Ibs. Number of units produced during the week 7,200 Actual wage per hour $14.83 Actual hours for the week (40 employees × 35 hours) 1,400 Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit 2$ Direct labor standard cost per unit Total standard cost per unit b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance 2$ Direct Materials Quantity Variance $ Total Direct Materials Cost Variance $
Chapter1: Financial Statements And Business Decisions
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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.
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Transcribed Image Text:Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee
presently provides 35 hours of labor per week. Information about a production week is as follows:
Standard wage per hour
$14.40
Standard labor time per unit
20 min.
Standard number of Ibs. of brass
1.4 Ibs.
Standard price per Ib. of brass
$11.75
Actual price per Ib. of brass
$12.00
Actual Ibs. of brass used during the week
10,382 Ibs.
Number of units produced during the week
7,200
Actual wage per hour
$14.83
Actual hours for the week (40 employees × 35 hours)
1,400
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
Direct materials standard cost per unit
2$
Direct labor standard cost per unit
Total standard cost per unit
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest
whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Direct Materials Price Variance
2$
Direct Materials Quantity Variance
$
Total Direct Materials Cost Variance
$
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