Question
Sanitex Inc. manufactures Purox, a hand sanitizer liquid at its Kamloops production facilities. The standard cost of making a barrel of Purox follows: Direct materials:
Sanitex Inc. manufactures Purox, a hand sanitizer liquid at its Kamloops production facilities. The standard cost of making a barrel of Purox follows:
Direct materials: 12 liters of Super Clorox at $1.50 per liter $18
Direct labor: 4 hours of labor at $16 per hour 64
Variable overhead: applied at a rate of 10 per direct labor hour 40
Total standard variable cost per unit $122
During the month of March, 200 barrels of Purox were manufactured. Sanitex released the following production cost relating to the manufacturing of these 200 barrels:
3000 liters of Super Clorox were purchased at a total cost of $4,320.
2,280 liters of Super Clorox were used in production.
840 hours of direct labor were incurred at at total cost of $13,356.
Note to students: Answer the question in the Excel worksheet template under the tab Question 1 provided by your instructor.
Required:
Part 1: Calculate the direct material price and quantity variances.
Part 2: Calculate the direct labor rate and efficiency variances.
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