Question
Monty, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly
Monty, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Monty estimated 9,600 tybos would be produced in March. Monty has established the following material and labor standards to produce one tybo:
Standard Quantity | Standard Price | ||||
---|---|---|---|---|---|
Direct materials | 2.5 pounds | $3 per pound | |||
Direct labor | 0.6 hours | $10 per hour |
During March 2022, the following activity was recorded by the company relating to the production of tybos:
1. | The company produced 9,250 units during the month. | ||
2. | A total of 24,280 pounds of materials were purchased at a cost of $66,770. | ||
3. | A total of 24,280 pounds of materials were used in production. | ||
4. | 5,240 hours of labor were incurred during the month at a total wage cost of $57,640. |
Calculate the following variances for March for Monty, Inc. Identify whether each variance is favorable or unfavorable.
(a) | Materials Price Variance | $enter a dollar amount | select an option UnfavorableNot ApplicableFavorable | |||
---|---|---|---|---|---|---|
(b) | Materials Quantity Variance | $enter a dollar amount | select an option UnfavorableFavorableNot Applicable | |||
(c) | Labor Price Variance | $enter a dollar amount | select an option FavorableNot ApplicableUnfavorable | |||
(d) | Labor Quantity Variance | $enter a dollar amount | select an option FavorableUnfavorableNot Applicable |
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