Standard Costing and Variance Analysis at IBM

Requirements:

• Calculate the direct materials price variance for IBM, given the following information:

• Actual Quantity Purchased: 10,000 units
• Standard Price per Unit: $100
• Actual Price per Unit: $110

• Compute the direct labor efficiency variance for IBM, with the following details:

• Standard Hours Allowed: 1,000 hours
• Actual Hours Worked: 900 hours
• Standard Rate per Hour: $20

• Analyze the reasons for the direct materials price variance and direct labor efficiency variance at IBM.
• Recommend actions to control costs and improve performance based on variance analysis results.