Last month, the following events took place at Superior Supplies:
• Produced 100,000 "leather-like" digital music player cases.
• Had budgeted (or standard) variable costs per unit (that is, per case):
Direct materials: 3 pounds at $1.50..................................................$ 4.50
Direct labor: 0.20 labor-hours at $22.50..................................................4.50
Variable production overhead:
.20 labor-hours at $10.00.................................................................200
Total per case...........................................................................$11.00
• Incurred actual production costs:
Direct materials purchased and used:
325,000 pounds at $1.40.........................................$455,000
Direct labor: 19,000 labor-hours at $25................475,000
Variable overhead........................................209,000
Required:
Compute the following:
1). Direct materials price variance Actual Quantity (Actual Price Per Unit-Standard Price Per Unit)
2). Direct materials efficiency (or quantity) variance (Standard Quantity-Actual Quantity X Standard Price)
3). Direct manufacturing labor price (or rate) variance (Actual Quantity (Actual Rate-Standard Rate)).
4). Direct manufacturing labor efficiency variance (Actual Hours-Standard Hours X Standard Rate)