Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards. Item Materials Item Labor Materials Per unit 2 lb. Direct labor Cost 80.00€ per lb. Per unit Cost 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours - $3.83 The January figures for purchasing, production, and labor are: The company purchased 230,100 pounds of raw materials in January at a cost of 78€ a pound. Production used 230,100 pounds of raw materials to make 116,000 units in January. Direct labor spent 18 minutes on each product at a cost of $7.80 per hour. Overhead costs for January totaled $41,342 variable and $75,000 fixed. Answer the following questions about standard costs. What is the labor price variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final c places, e.g. 125.)

Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards. Item Materials Item Labor Materials Per unit 2 lb. Direct labor Cost 80.00€ per lb. Per unit Cost 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours - $3.83 The January figures for purchasing, production, and labor are: The company purchased 230,100 pounds of raw materials in January at a cost of 78€ a pound. Production used 230,100 pounds of raw materials to make 116,000 units in January. Direct labor spent 18 minutes on each product at a cost of $7.80 per hour. Overhead costs for January totaled $41,342 variable and $75,000 fixed. Answer the following questions about standard costs. What is the labor price variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final c places, e.g. 125.)

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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