Standard Costing at Ford

• Values:
  • Standard Direct Materials Cost: $25 per unit
  • Actual Direct Materials Cost: $27 per unit
  • Standard Direct Labor Rate: $20 per hour
  • Actual Direct Labor Rate: $22 per hour

• Requirements:
  1. Calculate the direct materials price and quantity variances.
  2. Compute the direct labor rate and efficiency variances.
  3. Discuss the benefits of standard costing in manufacturing.
  4. Suggest improvements to Ford’s standard costing system.