Question
Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. in 2010, DII estimated the following standard costs for one of their
Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. in 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budget Quantity Budgeted Price
Direct Materials 0.10 pounds $30 per pound
Direct Labor 0.05 hours $15 per hour
During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour.
June's direct material efficiency variance is:
A. $1,360 favorable
B. $600 favorable
C. $1,860 unfavorable
D. None of these answers are correct
2. Diana Industries, Inc. (DII), developed standard costs for direct material and direct labor. in 2010, DII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budget Quantity Budgeted Price
Direct Materials 0.10 pounds $30 per pound
Direct Labor 0.05 hours $15 per hour
During June, DII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct manufacturing labor-hours at an average wage of $15.25 per hour.
June's direct manufacturing labor price variance is:
A. $125 favorable
B. $125 unfavorable
C. None of these answers are correct
D. $7,623.50 unfavorable
3. Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their products, the 30 gallon heavy plastic containers.
Budgeted Quantity Budgeted Price
Direct materials 0.20 pounds $25 per pound
Direct labor 0.10 hours $15 per hour
During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour.
July's direct material efficiency variance is:
A. $1,400 unfavorable
B. None of these answers are correct.
C. $2,500 unfavorable
D. $1,100 favorable
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