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Materials and Labor Variances At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products: Direct
Materials and Labor Variances
At the beginning of the year, Craig Company had the following standard cost sheet for one of its plastic products:
Direct materials (5 lbs. @ $4.00) | $20.00 |
Direct labor (2 hrs. @ $15.00) | 30.00 |
Standard prime cost per unit | $50.00 |
The actual results for the year are as follows:
- Units produced: 490,000.
- Materials purchased: 3,430,000 pounds @ $5.55.
- Materials used: 2,891,000 pounds.
- Direct labor: 1,078,000 hours @ $11.04.
Required:
1. Compute price and usage variances for materials. Enter amounts as positive numbers and select Favorable or Unfavorable.
Material price variance | $ | |
Material usage variance | $ |
2. Compute the labor rate and labor efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.
Labor rate variance | $ | |
Labor efficiency variance | $ |
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