C D E G 7 $19.00 1875 hours 1 Problem 4: Computing Direct Materials and Direct Labour Variances Relevant Formulae 3 Essential Suppliers Inc. manufactures Custom shelves in a small manufacturing facilitiy. DM Price Varlance = (Actual Price - Standard Price 4 The shelves are made from recycled wood. Essential Suppliers has 50 employees. 5 Each employee presently provides 37.5 hours of labor per week. DM Quantity Variance= (Actual Quantity - Standard 6 Information about a production week is as follows: Total DM Cost Variance EDM Price variance + DMO DL Rate Variance = (Actual Rate - Standard Rate) XA a Standard wage rate per hour $18.00 DL Time Variance = (Actual Hours - Standard Hours 9 Standard labor time per unit of shelf 48 minutes 10 Standard number of yards of wood per unit of shelf 2.5 yards Total DL Cost Variance = DL Rate Variance + DL 1 11 Standard price per yard of wood $7.00 12 Actual price per yard of wood $7.50 13 Actual yards of wood used during the week 6,900 yards 14 Number of units of shelves produced during the week 3,000 units 15 Actual wage rate per hour 16 Actual hours for the week (50 employees * 37.5 hours) 17 18 Required: 19 20 A. Determine the followings Material Variances and indicate if they are "favorable" or "unfavorable" 21 Use Excel fomula or show your working clearly to obtain partial marking. 22 23 Direct Materials Price Variance: 24 25 26 Direct Materials Quantity Variance: 27 28 29 Total Direct Materials Cost Variance: 30 31 32 B. Determine the followings Labor Variances and indicate if they are "favorable" or "unfavorable" 33 34 Direct Labor Rate Variance: 35 36 37 Direct Labor Time Variance: 38 39 40 Total Direct Labor Cost Variance: 41 42 43 44 45 46 Problem4 +