Question
Taylor Manufacturing Co. has the following data: Standards allowed to produce one unit of output: Direct materials: 4 pounds per unit @ $5.00 per pound
Taylor Manufacturing Co. has the following data:
Standards allowed to produce one unit of output: Direct materials: 4 pounds per unit @ $5.00 per pound Direct labor: 2 hours per unit @ $20 per hour
Actual results data: Production = 3,000 units. Purchased 20,000 pounds of direct material at $5.50 per pound. Used 11,700 pounds of material in production. Worked 6,200 direct labor hours at $20.50 per hour.
Calculate the variances listed below. Write the formulas. Indicate if each variance is favorable or unfavorable.
a. The direct material quantity variance b. The direct labor rate variance
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