Question
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: 500,000.
- Materials purchased: 3,500,000 pounds @ $4.50.
- Materials used: 2,950,000 pounds.
- Direct labor: 900,000 hours @ $13.32.
Required:
1. Compute price and usage variances for materials. Enter amounts as positive numbers and select Favorable or Unfavorable.
| Material price variance | ?$ | Favorable or Unfavorable |
| Material usage variance | ?$ | Favorable or Unfavorable |
2. Compute the labor rate and labor efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.
| Labor rate variance | $? | Favorable orUnfavorable |
| Labor efficiency variance | $? | Favorable or Unfavorable |
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Financial Accounting an introduction to concepts, methods and uses
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
13th Edition
978-0538776080, 324651147, 538776080, 9780324651140, 978-0324789003
