The Scheer Corporation produces ship models. The company uses a standard cost system and has set the following standards for materials and labor.

During this period, Scheer produced 10,000 ship models. The actual wood purchased and used was 22,000 pieces, at $0.90 per piece. There were no starting or ending inventories of wood. The actual direct labor used was 18,500 hours at $15 per hour.
A. Compute the standard cost of wood which should be incurred to produce 10,000 ship models.
B. Compute the actual total cost of the wood.
C. For the wood, compute:

a. The total variance

b. The materials usage variance

c. The materials rate variance.

Transcribed Image Text:

Wood Direct labor Total direct costs 2 pieces per unit, at $1 each 2 hours per unit, at $14 per hour $2 $28 $30