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: 380,000.
- Materials purchased: 2,660,000 pounds @ $5.90.
- Materials used: 2,280,000 pounds.
- Direct labor: 836,000 hours @ $12.72.
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 or Unfavorable |
| Labor efficiency variance | $ | Favorable or Unfavorable |
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
8th edition
978-1259569197
