Direct Materials and Direct Labor Variance Analysis

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has $90$ employees. Each employee presently provides $36$ hours of labor per week. Information about a production week is as follows:

Standard wage per hr$.$ $$15\mathrm{.}00$

Standard labor time per faucet $40$ min.

Standard number of lb$.$ of brass $3$ lb$.$

Standard price per lb$.$ of brass $$2\mathrm{.}40$

Actual price per lb$.$ of brass $$2\mathrm{.}50$

Actual lb$.$ of brass used during the week $14,350$ lb$.$

Number of faucets produced during the week $4,800$

Actual wage per hr$.$ $$14\mathrm{.}40$

Actual hrs$.$ for the week $3,240$ hrs$.$

Required:

a$.$ Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.

Direct materials standard cost per unit $fill in the blank $1$

Direct labor standard cost per unit fill in the blank $2$

Total standard cost per unit $fill in the blank $3$

b$.$ Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to two decimal places, if necessary. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct materials price variance $fill in the blank $4$

Direct materials quantity variance fill in the blank $6$

Total direct materials cost variance $fill in the blank $8$

c$.$ Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct labor rate variance $fill in the blank $10$

Direct labor time variance fill in the blank $12$

Total direct labor cost variance $fill in the blank $14$

Feedback Area