Direct Materials and Direct Labor Variance Analysis

Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 60 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Standard wage per hr: $18

Standard labor time per faucet: 12 min

Standard number of lbs of zinc: .80 lb.

Standard price per lb of zinc: $1.25

Actual price per lb. of zinc: $1.40

Actual lbs of zinc used during the week: 10,200 lbs.

Number of faucets produced during the week: 12,000

Actual wage per hr: $18.75

Actual hrs per week: 2,160 hrs

a. Determine the standard cost per unit for direct materials and direct labor.

Direct materials standard cost per faucet: $1

Direct labor standard cost per faucet: ____

b. Determine the direct labor price variance, direct labor quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.

Price variance: $____ Unfavorable

Quantity variance: ____Unfavorable

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount.

Rate Variance: $____ Unfavorable

Time variance: ____ Favorable