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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
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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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 Materials Labor Per unit 2 lb. Direct labor Per unit Cost 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours = $3.83 Cost 80.00€ per lb. 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 ans places, e.g. 125.) Labor price variance $
Transcribed Image Text: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 Materials Labor Per unit 2 lb. Direct labor Per unit Cost 15 min. $8.00 per hr. Predetermined overhead rate based on direct labor hours = $3.83 Cost 80.00€ per lb. 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 ans places, e.g. 125.) Labor price variance $
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