Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

Question

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Answer 1

Question

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.

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

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Answer 2

Question

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.

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

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Answer 3

Question

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.

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

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Answer 4

Question

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.

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

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Answer 5

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

Answer 6

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

Answer 7

Chapter 23, Problem 12E

(1)

To determine

Compute the direct materials price variance and quantity variance and indicate whether it is favorable or unfavorable.

Answer 8

(1)

Expert Solution

Explanation of Solution

Direct material price variance:

The variation in between actual price and estimated price paid for materials is called material price variance. It is used to determine difference in price paid for material the price that was supposed to be paid for material.

The following formula is used to calculate direct material price variance:

Direct materials price variance =[ ( Actual Price −Standard Price)× Actual Quantity]

Compute the direct materials price variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual cost of direct materials used.

Actual cost of direct materials used=(Actual quantity used× Actual price)=92,000 lbs×$2.95 per lb=$271,400

Step 2: Calculate the standard cost of materials used.

Standard cost of materials used=(Actual quantity used× Standard price)=(92,000×$3 per lb)=$276,000

Step 3: Calculate the direct materials price variance.

Direct materials price variance =[Actual cost of direct materials used−Standard cost of materials used]=$271,400−$276,000=$4,600(favorable)

Direct material quantity variance:

The variance which is used to compare the actual quantity of materials utilized in production with estimated quantity of materials that is supposed to be used in production and helps to find variation is called material quantity variance.

.

The following formula is used to calculate direct material quantity variance:

Direct materials quantity variance =[ ( Actual Quantity −Standard Quantity)× Standard Price]

Compute the direct materials quantity variance and indicate whether it is favorable or unfavorable:

Step 1: Calculate the actual quantity of materials used.

Actual quantity of materials used=(Actual quantity used × Standard price)=(92,000×$3 per lb)=$276,000

Step 2: Calculate the standard quantity of materials used.

Standard quantity of materials used=(Standard quantity × Standard price)=(90,000×$3 per lb)=$270,000

Working note:

Calculate the standard quantity:

Standard quantity = (Number of units to produce× Price per unit)= 9,000 units×10 pounds per unit=$90,000

Step 3: Calculate the direct materials quantity variance.

Direct materials quantity variance =[Actual quantity of direct materials used−Standard quantity of materials used]=$276,000−$270,000=$6,000(unfavorable)

Answer 9

(1)

Expert Solution

Answer 10

(1)

Expert Solution

Answer 11

Expert Solution

Answer 12

Conclusion

Hence, the direct materials price variance is $4,600 (favorable) and direct materials quantity variance is $6,000 (unfavorable).

Answer 13

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)

Working note:

Calculate the standard direct labor hours used:

Standard direct labor hours used = (Number of units manufactured× Total direct labor hours used)= 9,000 units×4 hours per unit=36,000 hours

Conclusion

Hence, the direct labor rate variance is $1,880 (unfavorable) and the direct labor efficiency variance is $9,600 (unfavorable).

Answer 14

(2)

To determine

Calculate the direct labor rate variances and efficiency variances and indicate whether it is favorable or unfavorable.

Answer 15

(2)

Expert Solution

Explanation of Solution

Total Direct Labor Variance

The total direct labor variance is a measure to determine the variation in the standard direct labor and the actual direct labor. This means that the difference between the cost which will be by the standard and the cost which is actually calculated.

Direct Labor Rate Variance

The direct labor rate variance is a measure to determine the variation in the estimated cost of the direct labor and the actual cost of the direct labor.

Compute the direct labor rate variances indicate whether it is favorable or unfavorable:

Direct labor rate variance = [(Actual direct labor hours used× Actual direct labor rate per hour)− (Actual direct labor hours used× Standard direct laborrate per hour)]= [(37,600 hours×$6.05 per hour)− (37,600 hours× $6.00 per hour)]=[$227,480−$225,600]=$1,880(unfavorable)

Direct labor efficiency variance is a measure that determines the difference between the estimated labor quantity and the actual labor quantity used.

Compute the direct labor efficiency variance:

Direct labor efficiency variance = [(Actual direct labor hours used× Standard direct labor rate per hour)− (Standard direct labor hours used× Standard direct labor rate per hour)]= [(37,600 hours×$6 per hour)− (36,000 hours× $6 per hour)]=[$225,600−$216,000]=$9,600(unfavorable)