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In early 2012, Duncan Manufacturing Inc. had budgeted for the production and sale of 20,000 units at a sales price of $25 per unit.
In early 2012, Duncan Manufacturing Inc. had budgeted for the production and sale of 20,000 units at a sales price of $25 per unit. The following information is available regarding the standard cost for each unit: Direct materials: Direct labor: $6.00 (3 pounds at $2.00 per lb) $3.50 (10 minutes of assembly at $.35 per minute) Actual results for 2012 were determined to be as follows: Number of units produced and sold: 18,000 units Sales revenue: Direct materials cost: Direct labor cost: $477,000 ($26.5 per unit) $119,925 (58,500 lbs purchased and used at $2.05 per lb) $51,300 (171,000 minutes at $.30 per minute) Required: Compute each of the following variances. Indicate whether the variance is favorable (F) or unfavorable (U). A. Direct materials price variance B. Direct materials usage variance C. Direct labor rate variance D. Direct labor efficiency variance
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