Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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:

  1. Units produced: 490,000.
  2. Materials purchased: 3,430,000 pounds @ $5.55.
  3. Materials used: 2,891,000 pounds.
  4. 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 $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operational Auditing A Complete Guide

Authors: Gerardus Blokdyk

2019 Edition

0655515879, 978-0655515876

More Books

Students also viewed these Accounting questions

Question

Writing a Strong Introduction

Answered: 1 week ago