Ans 1 Direct laban rate variance = Actual hass X ( Adual rate - stended rate ) Here , Actual hours = 41,000 Actual rate = $ 594, 500 / 41000 direct labour hours = $ 14. so per hour And , standard rate = $14. 30 per hour Direct crate of Direct labor gate variance = 41000 x ( $14. 50 - $ 14 . 30 ) = 18 020 1. = $ 8 200 Unfavorable I Direct labor efficiency variance = standard Rate X CAckval hours - standard hour )Date. Page No. Standard Deale = $ 14. 30 per hour Actual her = 41 020 Istandand hous = 5, 500 Units x lo hours = 55, 000 he Direct labor efficiency variance = $14 . 30 x ( 41020 - 2 5 50 00 ) = $ 200, 20 0 favorable Direct labor cost variance = Direct labor rate variance Direct labor efficiency variance 1 Direct labor make variance = $ 8200 Unfavorable Direct labor efficiency "variance = $ 200, 200 towerable Direct labor cost variance = $ 8, 200 0 $ 200, 200 = $192,000 Favorable . 2 7 Direct material efficiency variance = standard price X ( Actual quantity - standard quantity ) Direct material efficiency variance = $ 1700 favorable standard price = $2 standard quantity = 5, soo units X40 pounds = 2 20 on0 pounds .Date. oh ops9 Page No. There dose , $1700 = $2 ( Actual quantity - 220,000 ) $ 1700 - Actual quatity - 220,000 $ 2 old Actual quantity =2 220,000 - 850 = 219, 150 pounds . 37 Actual price per pound of direct materials used is production |= Cost of direct material purchased / Direct material purchases . = $ 43 2000 / 1601020 = $2.70 per pound . 4 ] Direct material price variance = Actual quality X ( Actual price - standard price ) Here, Actual quantity = 219, Ise pounds Actual price = $ 2 . 70.\fTitanium Actual results for the first month using the online sup 400 5,200 lb. for $88,400 Bicycles produced Titanium purchased 4,700 lb. Titanium used in production Dir 1. Compute the direct materials price and efficiency variances. 2. What factors can explain the variances identified in requirement ? Could any other variance 3. Was switching suppliers a good idea for Best Bikes? Explain why or why not. affected. Should Michael Bentfield's performance evaluation be based solely of fences? show duction manager's evaluation he based solely on efficiency variances: whyimportant ford the anne Johnson to understand the causes of a variance before she evaluates performances 5. Other than performance evaluation, what reasons are there for calculating variances? What future problems could result from Best Bikes' decision to buy a lower quality of titanium from online marketplace? 7-39 Direct manufacturing labor and direct materials variances, missing data. (CMA, heavily adapt Young Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct materials and died) manufacturing labor is $223 per board. This includes 40 pounds of direct materials, at the budgeted price $2 per pound, and 10 hours of direct manufacturing labor, at the budgeted rate of $14.30 per hour. Following are additional data for the month of July: Units completed Direct material purchases 5,500 units Cost of direct material purchases 160,000 pounds Actual direct manufacturing labor-hours $432,000 Actual direct labor cost 41,000 hours Direct materials efficiency variance $594,500 $ 1,700 FAS There were no beginning inventories. 1. Compute direct manufacturing labor variances for July. 2. Compute the actual pounds of direct materials used in production in July. + Jumal 3. Calculate the actual price per pound of direct materials purchased. 4. Calculate the direct materials price variance. 7-40 Direct materials efficiency, mix, and yield variances. Gamma's Snacks produces snack mix the gourmet and natural foods market. Its most popular product is Tempting Trail Mix, a mixture of p dried cranberries, and chocolate pieces. For each batch, the budgeted quantities, budgeted pri budgeted mix of direct materials are as follows: Quantity per Batch Price per Cup Budgeted Mix Peanuts 50 cups $1 50% Dried cranberries 30 cups $2 30% Chocolate pieces 20 cups $3 20% tly affect t
