Question
During June, Danby Companys material purchases amounted to 6,200 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 2,100
During June, Danby Companys material purchases amounted to 6,200 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 2,100 units were as follows:
Direct labor: | $ | 121,695 | ($18.30 per hour) |
Direct material: | $ | 33,000 | ($7.50 per pound) |
The standards for one unit of Danby Companys product are as follows:
Direct Labor: | Direct Material: |
Quantity, 3 hours per unit | Quantity, 2 pounds per unit |
Rate, $18.20 per hour | Price, $7.20 per pound |
Required:
Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct-labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
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