Question
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as
Shade Company adopted a standard cost system several years ago. The standard costs for direct labor and direct materials for its single product are as follows: Materials (5 kilograms $12/kilogram) = $60/unit; direct labor (3.5 hours/unit $20/hour) = $70/unit. All materials are issued at the beginning of processing. The operating data shown below were taken from the records for December: In-process beginning inventory None In-process ending inventory80% complete as to labor 1,070 units Units completed during the period 6,920 units Budgeted output 7,530 units Purchases of materials (in kilograms) 45,500 Total actual direct labor cost incurred $ 547,308 Direct labor hours worked (AQ) 27,600 hours Materials purchase-price variance $ 6,825 favorable Increase in materials inventory in December 4,300 kilograms The direct labor flexible-budget variance for December (rounded to the nearest dollar) was:
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