9.6.8

Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Standard wage per hour	$16.20
Standard labor time per unit	15 min.
Standard number of lbs. of brass	1.4 lbs.
Standard price per lb. of brass	$10.75
Actual price per lb. of brass	$11.00
Actual lbs. of brass used during the week	11,248 lbs.
Number of units produced during the week	7,800
Actual wage per hour	$16.69
Actual hours for the week (50 employees 36 hours)	1,800

Required:

a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

Direct materials standard cost per unit	$___
Direct labor standard cost per unit	$___
Total standard cost per unit	$___

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance	$___	Unfavorable
Direct Materials Quantity Variance	$___	Unfavorable
Total Direct Materials Cost Variance	$___	Unfavorable

c. Mackinaw Inc. processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 74,000 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	192,400 lbs. at $5.00		190,500 lbs. at $4.80
Direct labor	18,500 hrs. at $18.50		18,930 hrs. at $18.90
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 19,310 direct
	labor hrs.:
		Variable cost, $3.10	$56,780 variable cost
		Fixed cost, $4.90	$94,619 fixed cost

Each unit requires 0.25 hour of direct labor.

Required:

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance	$___	Favorable
Direct Materials Quantity Variance	$___	Favorable
Total Direct Materials Cost Variance	$___	Favorable

b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Labor Rate Variance	$___	Unfavorable
Direct Labor Time Variance	$___	Unfavorable
Total Direct Labor Cost Variance	$___	Unfavorable

c. Determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variable factory overhead controllable variance	$___	Favorable
Fixed factory overhead volume variance	$___	Unfavorable
Total factory overhead cost variance	$___	Unfavorable