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The Gordon Engine Company produces parts for railroad cars and engines. For one of the parts produced by the company, the standard costs for direct
The Gordon Engine Company produces parts for railroad cars and engines. For one of the parts produced by the company, the standard costs for direct labor is shown below: Hours per Unit Rate Direct Labor 5 $18.00 Actual data for the company's most recent month of operations include 12,000 pounds of direct materials purchased at a cost of $36,000. All of this material was used for the actual units produced for this month. Additional actual data for the most recent month is as follows: Units produced ......................... 2,500 Direct Labor Costs ................. $222,000 Labor Efciency Variance ...... $9,000F Materials Qty Variance ......... $6,500U Materials Spend Variance ..... $3,500U 1. Calculate the standard m costs for direct materials which would have been used to produce the company's master (or planning) budget. 2. Calculate the direct labor rate variance and the total direct labor spending variance
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