Question
Johnston Company has a standard costing system and keeps all its costs up to date. The company's main product is cotton bed sheets, which are
Johnston Company has a standard costing system and keeps all its costs up to date. The company's main product is cotton bed sheets, which are made in a single department. The standard variable costs for one unit of product are as follows:
Direct materials (3 yards at $12.00 per yard) | $36.00 |
Direct labor (2 hours at $9.00 per hour) | 18.00 |
Variable overhead (2 hours @ $5.00 per direct labor hour) | 10.00 |
Standard variable cost per unit | $64.00 |
During the year, it produced and sold 4,900 units and it purchased 15,000 yards of direct materials; the purchase cost was $11.80 per yard. The average labor rate was $9.20 per hour, and 10,100 direct labor hours were worked. Using the data given, compute the following:
1. Direct materials cost variances:
a. Direct materials price variance $ _________ Direct materials price variance F=Favorable or U = Unfavorable _________
b. Direct materials quantity variance $ _________ Direct materials quantity variance F=Favorable or U = Unfavorable___________
c. Total direct materials cost variance $__________nDirect materials cost variance F=Favorable or U = Unfavorable_______________
2. Direct labor cost variances:
a. Direct labor rate variance $ _______ Direct labor rate variance . F=Favorable or U = Unfavorable __________
b. Direct labor time variance $ ________Direct time variance F=Favorable or U = Unfavorable __________
c. Total direct labor cost variance $________Direct labor cost variance F=Favorable or U = Unfavorable __________
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