Question
Requirement 1a. Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct
Requirement 1a.
Tharaldson Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 5.5 | ounces | $ | 4.00 | per ounce | $ | 22.00 | ||
| Direct labor | 0.6 | hours | $ | 11.00 | per hour | $ | 6.60 | ||
| Variable overhead | 0.6 | hours | $ | 8.00 | per hour | $ | 4.80 | ||
The company reported the following results concerning this product in June.
| Originally budgeted output | 4,100 | units | |
| Actual output | 4,100 | units | |
| Raw materials used in production | 23,500 | ounces | |
| Purchases of raw materials | 20,400 | ounces | |
| Actual direct labor-hours | 4,800 | hours | |
| Actual cost of raw materials purchases | $ | 42,600 | |
| Actual direct labor cost | $ | 14,100 | |
| Actual variable overhead cost | $ | 4,050 | |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The materials quantity variance for June is:
Requirement 1b.
Tharaldson Corporation makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate | Standard Cost Per Unit | |||||||
| Direct materials | 5.2 | ounces | $ | 3.00 | per ounce | $ | 15.60 | ||
| Direct labor | 0.3 | hours | $ | 14.00 | per hour | $ | 4.20 | ||
| Variable overhead | 0.3 | hours | $ | 5.00 | per hour | $ | 1.50 | ||
The company reported the following results concerning this product in June.
| Originally budgeted output | 4,400 | units | |
| Actual output | 4,600 | units | |
| Raw materials used in production | 23,000 | ounces | |
| Purchases of raw materials | 23,500 | ounces | |
| Actual direct labor-hours | 580 | hours | |
| Actual cost of raw materials purchases | $ | 39,500 | |
| Actual direct labor cost | $ | 14,400 | |
| Actual variable overhead cost | $ | 4,200 | |
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
The labor efficiency variance for June is:
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