Question
Direct Materials Variances The following data relate to the direct materials cost for the production of 2,300 automobile tires: Actual: 57,900 lbs. at $1.9 per
Direct Materials Variances
The following data relate to the direct materials cost for the production of 2,300 automobile tires:
Actual: | 57,900 lbs. at $1.9 per lb. | |
Standard: | 59,100 lbs. at $1.85 per lb. |
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. 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 1 | FavorableUnfavorable |
Direct Materials Quantity Variance | $fill in the blank 3 | FavorableUnfavorable |
Total Direct Materials Cost Variance | $fill in the blank 5 | FavorableUnfavorable |
b. The direct materials price variance should normally be reported to the
Plant ManagerPurchasing Department
. When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the
Purchasing DepartmentProduction Supervisor
Direct Labor Variances
Ada Clothes Company produced 14,000 units during April. The Cutting Department used 2,700 direct labor hours at an actual rate of $13.40 per hour. The Sewing Department used 4,500 direct labor hours at an actual rate of $13.10 per hour. Assume there were no work in process inventories in either department at the beginning or end of the month. The standard labor rate is $13.30. The standard labor time for the Cutting and Sewing departments is 0.2 hour and 0.3 hour per unit, respectively.
a. Determine the direct labor rate, direct labor time, and total direct labor cost variance for the (1) Cutting Department and (2) Sewing Department. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Cutting Department | Sewing Department | |
Direct Labor Rate Variance | $fill in the blank 1 FavorableUnfavorable | $fill in the blank 3 FavorableUnfavorable |
Direct Labor Time Variance | $fill in the blank 5 FavorableUnfavorable | $fill in the blank 7 FavorableUnfavorable |
Total Direct Labor Cost Variance | $fill in the blank 9 FavorableUnfavorable | $fill in the blank 11 FavorableUnfavorable |
b. The two departments have opposite results. The Cutting Department has a(n)
favorableunfavorable
rate variance and a(n)
favorableunfavorable
time variance, resulting in a total
favorableunfavorable
cost variance. In contrast, the Sewing Department has a(n)
favorableunfavorable
rate variance but has a(n)
favorableunfavorable
time variance, resulting in a total
favorableunfavorable
cost variance.
. When the favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the
Purchasing DepartmentProduction Supervisor
.
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