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: 350,000.
- Materials purchased: 2,450,000 pounds @ $5.35.
- Materials used: 2,205,000 pounds.
- Direct labor: 630,000 hours @ $12.24.
Required:
1. Compute price and usage variances for materials. Enter amounts as positive numbers and select Favorable or Unfavorable.
| Material price variance | $fill in the blank 1 | FavorableUnfavorable |
| Material usage variance | $fill in the blank 3 | FavorableUnfavorable |
2. Compute the labor rate and labor efficiency variances. Enter amounts as positive numbers and select Favorable or Unfavorable.
| Labor rate variance | $fill in the blank 5 | FavorableUnfavorable |
| Labor efficiency variance | $fill in the blank 7 | FavorableUnfavorable |
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Financial Accounting Version 3.0
Authors: Leah Kratz, Joe Ben Hoyle, C. J. Skender
3rd Edition
1453392904, 9781453392904
