Chapter 6 Question 8Sheffield Construction Consultants performs cement core tests in its Greenville laboratory. The following standard costs for the tests have been developed by the company’s controller, Landon Sheffield, based on performing 2,100 core tests per month. Standard Price Standard Quantity Standard Cost Direct materials $0.50 per pound 5 pounds $2.50 Direct labor $10 per DLH 0.50 DLH 5.00 Variable overhead $9 per DLH 0.50 DLH 4.50 Fixed overhead $16 per DLH 0.50 DLH 8.00 Total standard cost per test $20.00 At the end of March, London reported the following operational results: ● The company actually performed 2,280 core tests during the month. ● 8,500 pounds of direct materials were purchased during the month at a total cost of $5,700. ● 6,200 pounds of direct materials were used to conduct the core tests. ● 840 direct labor hours were worked at a total cost of $9,830. ● Actual variable overhead was $7,700. ● Actual fixed overhead was $15,800. (a) Calculate the direct materials price variance for March. (Round per unit value to 2 decimal places, e.g. 52.75 and final answer to 0decimal places, eg. 5,275. If variance is zero, select "Not Applicable" and enter O for the amounts.)$1530UnfavorableDirect materials price variance(b) Calculate the direct materials quantity variance for March. (Round answer to O decimal places, eg. 5,275. If variance is zero, select"Not Applicable" and enter O for the amounts.)242600FavorableDirect materials quantity variance(c) Calculate the direct labor rate variance for March. (Round per unit value to 2 decimal places, eg. 52.75 and final answer to O decimalplaces, e.g. 5,275. If variance is zero, select "Not Applicable" and enter O for the amounts.)5628UnfavorableDirect labor rate variance%24

Direct Material price variance = (Actual price per pound - Standard price per pound)*Actual quantity…

Answered: Sheffield Construction Consultants…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Chapter 6 Question 8

Sheffield Construction Consultants performs cement core tests in its Greenville laboratory. The following standard costs for the tests have been developed by the company’s controller, Landon Sheffield, based on performing 2,100 core tests per month.

	Standard Price	Standard Quantity	Standard Cost
Direct materials	$0.50 per pound	5 pounds		$2.50
Direct labor	$10 per DLH	0.50 DLH		5.00
Variable overhead	$9 per DLH	0.50 DLH		4.50
Fixed overhead	$16 per DLH	0.50 DLH		8.00
Total standard cost per test				$20.00

At the end of March, London reported the following operational results:
●		The company actually performed 2,280 core tests during the month.
●		8,500 pounds of direct materials were purchased during the month at a total cost of $5,700.
●		6,200 pounds of direct materials were used to conduct the core tests.
●		840 direct labor hours were worked at a total cost of $9,830.
●		Actual variable overhead was $7,700.
●		Actual fixed overhead was $15,800.

(a) Calculate the direct materials price variance for March. (Round per unit value to 2 decimal places, e.g. 52.75 and final answer to 0
decimal places, eg. 5,275. If variance is zero, select "Not Applicable" and enter O for the amounts.)
$
1530
Unfavorable
Direct materials price variance
(b) Calculate the direct materials quantity variance for March. (Round answer to O decimal places, eg. 5,275. If variance is zero, select
"Not Applicable" and enter O for the amounts.)
24
2600
Favorable
Direct materials quantity variance
(c) Calculate the direct labor rate variance for March. (Round per unit value to 2 decimal places, eg. 52.75 and final answer to O decimal
places, e.g. 5,275. If variance is zero, select "Not Applicable" and enter O for the amounts.)
5628
Unfavorable
Direct labor rate variance
%24

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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