Question
Fall Industries has set the following standards for one unit: Direct material Quantity: 45 yards Price per yard: $2.70 per yard Direct labor Quantity: 9
Fall Industries has set the following standards for one unit:
Direct material
Quantity: 45 yards
Price per yard: $2.70 per yard
Direct labor
Quantity: 9 hours per unit
Rate per hour: $16 per hour
Actual costs incurred in the production of 1,200 units were as follows:
Direct material: $99,000 ($2.75 per yard)
Direct labor: $129,560 ($15.80 per hour)
All materials purchased were consumed during the period. Required:
1. Calculate the direct-material price and quantity variances. Indicate whether each variance is favorable or unfavorable.
2. Calculate the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
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