Question
Question: Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not ideal at this point, but the management is
Question:
Waterways Corporation uses very stringent standard costs in evaluating its manufacturing efficiency. These standards are not "ideal" at this point, but the management is working toward that as a goal. At present, the company uses the following standards.
Materials | ||
Item | Per unit | Cost |
Metal | 1 lb. | 63 per lb. |
Plastic | 12 oz. | $1.00 per lb. |
Rubber | 4 oz. | 88 per lb. |
Direct labor | ||
Item | Per unit | Cost |
Labor | 15 min. | $8.00 per hr. |
Predetermined overhead rate based on direct labor hours = $4.28 |
The January figures for purchasing, production, and labor are:
The company purchased 229,000 pounds of raw materials in January at a cost of 78 a pound. |
Production used 229,000 pounds of raw materials to make 115,500 units in January. |
Direct labor spent 18 minutes on each product at a cost of $7.80 per hour. |
Overhead costs for January totaled $54,673 variable and $73,800 fixed. |
Answer the following questions about standard costs.
What is the materials quantity variance?
Materials quantity variance ____________$ U/F/N
What is the total materials variance?
Total materials variance ____________$ U/F/N
What is the labor price variance?
Labor price variance ____________$ U/F/N
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