Case 10-49 Direct-Material and Direct-Labor Variances; Job-Order Costing; Journal Entries (Appendix) (LO 10-1, 10-3, 10-6, 10-9) [The following information applies to the questions displayed below] Metro Fashions, Inc., manufactures women's blouses of one quality, which are produced in lots to fill each special order. Its customers are department stores in various cities. Metro Fashions sews the particular stores' labels on the blouses. During November the company worked on three orders, for which the month's job-cost records disclose the following data Lot Number Boxes in Lot N42 1.200 1,900 N44 1.300 Material Used yards) 26,500 41.240 28,655 Hours Worked 3.580 5.720 2.370 N43 9 The following additional information is available: 1. The firm purchased 85,000 yards of material during November at a cost of $111.400. 2. Direct labor during November amounted to $175,050. According to payroll records. production employees were paid $15 per hour. 3. There was no work in process on November 1. During November, lots N42 and N43 were completed. All material was issued for lot N44, which was 60 percent completed as to conversion (ie, direct labor and overhead). 4. The standard costs for a box of six blouses are as follows: Direct material Direct labor Production overhead 22 yards at $ 1.30 3 hours at $14.70 3 hours at $11.00 $ 28.60 44.10 33.00 Standard cost per box $105.70 Required: 1. Complete the following schedule computing the standard cost of lots N42, N43, and N44 for November. (Round "Standard Cost per Box" to 2 decimal places.) METRO FASHIONS, INC. Standard Cost of Production For November Lot Quantity Standard Cost Total Standard (boxes) per Box Cost N42 1,200 N43 1,900 N44 1,300 Standard cost of production $ 0 2. Complete the following schedules. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance). Round "Standard price", "Standard rate" and "Rate paid in excess of standard" to 2 decimal places.) a. Direct-material purchase price variance. (Hint: Must be computed in total, across all three production lots.) METRO FASHIONS, INC. Direct-Material Purchase Price Variance For November Actual cost of materials purchased Standard cost of materials purchased Direct-material purchase price variance b. Direct-material quantity variance. METRO FASHIONS, INC. Direct Material Quantity Variances For November Lot No. N43 N42 N44 Total 1,200 1.900 1,300 4,400 Direct-material quantity variance Standard yards Boxes in lot Standard yards per box Total standard quantity Actual yards used Variance in yards Standard price Direct-material quantity variance 0 0 0 0 0 0 0 0 $ 0 $ 0 $ 0 S 0 c. Direct-labor efficiency variance. METRO FASHIONS, INC. Direct-Labor Variances For November Lot No. N43 N42 N44 Total 0 0 Direct-labor efficiency variance: Standard hours: Boxes in lot Standard hours per box Total Percentage of completion Total standard hours Actual hours worked Variance in hours Standard rate Direct-labor efficiency variance 0 % % % 0 0 0 0.00 0.00 0.00 0.00 $ 0 $ 0 $ 0 $ 0 d. Direct-labor rate variance METRO FASHIONS, INC. Direct-Labor Variances For November Lot No. N43 N42 N44 Total Direct-labor rate variance Actual hours worked Rate paid in excess of standard Variance $ $ 0 $ 0 $ 0
