Direct Materials and Direct Labor Variance Analysis

Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:

Standard wage per hour $17.40

Standard labor time per unit 20 min.

Standard number of lbs. of brass 1.8 lbs.

Standard price per lb. of brass $9.50

Actual price per lb. of brass $9.75

Actual lbs. of brass used during the week 13,905 lbs.

Number of units produced during the week 7,500

Actual wage per hour $17.92

Actual hours for the week (40 employees 40 hours) 1,600

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 $ 17.1

Direct labor standard cost per unit $ 5.8

Total standard cost per unit $ 22.9

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Materials Price Variance $ 3,476 Unfavorable

Direct Materials Quantity Variance $ 3,848 Unfavorable

Total Direct Materials Cost Variance $ 7,324 Unfavorable

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Direct Labor Rate Variance $ 832 Unfavorable

Direct Labor Time Variance $ Favorable

Total Direct Labor Cost Variance $ Favorable