Question
Gardener's Market manufactures hedgers. During the year, it manufactured 5,000 hedgers, using 4.2 hours of direct labor per hedger at a rate of $8. The
Gardener's Market manufactures
hedgers. During the year, it manufactured 5,000 hedgers, using 4.2 hours of direct labor per hedger at a rate of $8. The materials and labor standards for manufacturing the hedgers are:
Direct materials (10 units @ $2) $20
Direct labor (4 hours @ $7.50 per hour) 30
Gardener's Market actually purchased and used 53,000 units of direct materials at a price of
$2.25 per unit.
1. Determine the materials price variance and whether it is favorable or unfavorable.
2.Determine the materials usage variance and whether it is favorable or
unfavorable.
3.Determine the labor rate variance and whether it is
favorable or unfavorable.
4.Determine the labor efficiency variance and whether it is favorable or
unfavorable.
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