Question
Outdoor Company manufactures camping tents from a lightweight synthetic fabric. Each tent has a standard materials cost of $21, consisting of 4 yards of fabric
Outdoor Company manufactures camping tents from a lightweight synthetic fabric. Each tent has a standard materials cost of $21, consisting of 4 yards of fabric at $5.25 per yard. The standards call for 2 hours of assembly at $10 per hour. The following data were recorded for October, the first month of operations :
FABRIC PURCHASED | 9000 YARDS X $5.00 PER YARD |
FABRIC USED IN PRODUCTION OF 1700 TENTS | 7000 YARDS |
DIRECT LABOR USED | 3600 HOURS X $10.75 PER HOUR |
REQUIRED
A.) Compute all standard cost variances for material and labor.
B.) Give one possible reason for each of the preceding variances.
C.) Determine the standard variable cost of the 1700 tents produced, separated into direct materials and labor.
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