Question
According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 1,950 robes. At
According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 1,950 robes.
At standard, each robe should require 2.8 yards of material. All of the materials purchased during the month were used in production.
Standard costs:
Direct Materials: Total $35,490; per unit of product: $18.20
Direct labor: Total $7,020 ; Per unit of product : $ 3.60
Variable Manufacturing Overhead (based on direct labor hours) Total: 2,340; Per Unitof product: $1.20
During Sep,the factory worked only 760 direct labor-hours and produced 2,000 robes. The following actual costs were recorded during the month:
Direct Materials (6,000 yards) Total: $36,000; Per unit of Product: $18.00
Direct LaborTotal: $7,600; Per unit of Product : 3.80
Variable Manufacturing OHTotal: $3,800; per unit of product: $1.90
What would be the Materials Price Variance?
AQxAP=2,000x18.00=36000
AQxSP=2000x18.20=36400
therefore would be $400 Favorable? Please let me know if I am correct. Thank you
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