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The Litton Company has established standards as follows: Direct material Direct Labor 3 pounds per unit @ 4 per pound= 12 per unit 2 hours
The Litton Company has established standards as follows: Direct material Direct Labor 3 pounds per unit @ 4 per pound= 12 per unit 2 hours per unit @ 8 per hour= 16 per unit Variable manufacturing overhead 2 hours per unit @ 5 per hour= 10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units produced Direct materials used 600 units 2,000 pounds Direct materials purchased (3,000 pounds) 11,400 Direct Labor cost (1,100 hours) 9,240 Variable manufacturing overhead cost incurred 5,720 The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The materials quantity variance is: 800u 4,000u 760u 760f
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