Question
. Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set
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Canandaigua Container Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. |
Direct Labor: | Direct Material: |
Quantity, 0.25 hour | Quantity, 4 kilograms |
Rate, $12 per hour | Price, $0.60 per kilogram |
Actual material purchases amounted to 240,000 kilograms at $0.62 per kilogram. Actual costs incurred in the production of 50,000 units were as follows: |
Direct labor: | $158,600 for 13,000 hours |
Direct material: | $130,200 for 210,000 kilograms |
Required: | |
1. | Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.) 1) Direct material price variance 2) Direct material quantity variance 3) Direct material purchase price variance 4) Direct labor rate variance 5) Direct labor efficiency variance |
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