Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials and direct labor) of its single product are:
Dash Company adopted a standard costing system several years ago. The standard costs for the prime costs (i.e., direct materials and direct labor) of its single product are:
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 5P: High-End Products Inc. uses a standard cost system in accounting for the cost of production of its...
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Dash Company adopted a
Material | (8 kilograms × $5.00 per kilogram) | $ | 40.00 | |
Labor | (6 hours × $18.20 per hour) | 109.20 | ||
All materials are added at the beginning of processing. The following data were taken from the company’s records for November:
In-process beginning inventory | None | ||
In-process ending inventory | 800 | units, 75% complete as to direct labor | |
Units completed | 5,600 | units | |
Budgeted output | 6,000 | units | |
Purchases of materials | 50,000 | kilograms | |
Total actual direct labor costs | $ | 600,000 | |
Actual direct labor hours | 36,500 | hours | |
Materials usage variance | $ | 1,500 | Unfavorable |
Total materials variance | $ | 750 | Unfavorable |
Required:
1. Compute for November:
a. The direct labor efficiency variance. Is this variance favorable (F) or unfavorable (U)?
b. The direct labor rate variance. Is this variance favorable (F) or unfavorable (U)?
c. The actual number of kilograms of material used in the production process during the month.
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