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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 Materials Item Labor 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.

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 Materials Item Labor 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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 quantity variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final answer to 0 decimal places, e.g. 125.) Labor quantity variance $
Transcribed Image Text:What is the labor quantity variance? (Round per unit calculations to 2 decimal places, e.g. 1.25 and final answer to 0 decimal places, e.g. 125.) Labor quantity variance $
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