Question
The following information is from ABC Manufacturings static budget for 2020: Expected production and sales : 60,000 units Expected selling price per unit : $300
- The following information is from ABC Manufacturings static budget for 2020:
Expected production and sales : 60,000 units
Expected selling price per unit : $300
Expected variable manufacturing overhead costs : $1,800,000 ($15/direct
manufacturing labour hour,
120,000 hours)
Expexted total fixed manufacturing costs : $2,500,000
Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor:
| Standard Quantity | Standard Price | Standard Unit Cost |
Direct materials | 4 kgs | $25 per kg | $100 |
Direct manufacturing labor | 2 hours | $25 per hour | $50 |
During 2020, actual number of units produced and sold was 50,000, at an average selling price of $310. Actual cost of direct materials used was $5,040,000, based on 210,000 kgs purchased at $24 per kg. Direct manufacturing labor-hours actually used were 105,000, at the rate of $26 per hour. As a result, actual direct manufacturing labor costs were $2,730,000. Actual variable overhead costs were $1,680,000 and actual fixed costs were $2,450,000. There were no beginning or ending inventories.
- Compute price and efficiency variances for direct materials and direct manufacturing labor.
Direct Materials Price Varience |
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Direct Materials Efficiency Varience |
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Direct Labor Price Varience |
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Direct Labor Efficiency Varience |
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