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Milton Company uses a standard cost system. Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour. Four
Milton Company uses a standard cost system.
- Standards call for 2 direct labor hours per widget. The standard labor rate is $10 per hour.
- Four pounds of material are needed for eachwidget at a standard cost of $2.25 per pound.
Milton actually produces 17,000widgets during the year.
- Direct labor costs are $359,100 for 34,200 hours.
- Miltonpurchased and used 70,000 pounds of materials at $2.50 per pound.
For direct materials, what is the usage variance? Answers are labeled as favorable (F) or unfavorable (U).
For direct labor, what is the efficiency (usage) variance? Answers are labeled as favorable (F) or unfavorable (U).
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