Question
Amber Company produces iron table and chair sets. During October, Ambers costs were as follows: Actual purchase price $ 2.30 per lb. Actual direct labor
Amber Company produces iron table and chair sets. During October, Ambers costs were as follows:
Actual purchase price | $ 2.30 | per lb. |
Actual direct labor rate | $ 7.50 | per hour |
Standard purchase price | $ 2.10 | per lb. |
Standard quantity for sets produced | 970,000 | lbs. |
Standard direct labor hours allowed | 11,000 | |
Actual quantity purchased in October | 1,115,000 | lbs. |
Actual direct labor hours | 10,000 | |
Actual quantity used in October | 1,000,000 | lbs. |
Direct labor rate variance | $5,500 | F |
Required: 1. Calculate the total cost of purchases for October.
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2. Compute the direct materials price variance based on quantity purchased. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
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3. Calculate the direct materials quantity variance based on quantity used. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
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4. Compute the standard direct labor rate for October. (Round your answer to 2 decimal places.)
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5. Compute the direct labor efficiency variance for October. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
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