Financial and Managerial Accounting, $9^{th}$ Edition

Chapter $21$ Alternate Demo Problem #$1$

Problem #$1$

XYZ Company manufactures tables. A standard cost card for the manufacture of one table shows the following:

Standard Cost per Table:

Direct material: $4$ sq$.$ ft$.$ @ $$3/$sq$.$ ft$.$

Direct labor: $2$ hours @ $$8/$hr

Total prime costs

$$12$

$16$

$$28$

In November, the company produced $1,000$ tables. Actual production costs and quantities were:

Direct material: $3,900$ sq$.$ ft$.$ @ $$3\mathrm{.}10/$sq$.$ ft$.$ $$12$

Direct labor: $2,300$ hours @ $$\frac{7\mathrm{.}80}{h}r16$

Required:

Calculate the price and quantity variances for direct material and direct labor.