Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow: Standard QuantityStandard Price (Rate)Standard Unit CostSilver0.65 ounce$25.00 per ounce$16.25 Crystals5.00$0.50 crystal $2.50 Direct labor2.00 hours$15.00 per hours$30.00 During the month of January, Crystal Charm made 1,500 charms. The company used 935 ounces of silver (total cost of $24,310) and 7,550 crystals (total cost of $3,624.00), and paid for 3,150 actual direct labor hours (cost of $45,675.00).Calculate Crystal Charm’s direct materials variances for silver and crystals for the month of January.Calculate Crystal Charm’s direct labor variances for the month of January.

INTRODUCTION: Direct material total variance in variance analysis (accounting) is the difference…

Answered: Crystal Charm Company makes handcrafted…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...

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Crystal Charm Company makes handcrafted silver charms that attach to jewelry such as a necklace or bracelet. Each charm is adorned with two crystals of various colors. Standard costs follow:

	Standard Quantity	Standard Price (Rate)	Standard Unit Cost
Silver	0.65 ounce	$25.00 per ounce	$16.25
Crystals	5.00	$0.50 crystal	$2.50
Direct labor	2.00 hours	$15.00 per hours	$30.00

During the month of January, Crystal Charm made 1,500 charms. The company used 935 ounces of silver (total cost of $24,310) and 7,550 crystals (total cost of $3,624.00), and paid for 3,150 actual direct labor hours (cost of $45,675.00).

Calculate Crystal Charm’s direct materials variances for silver and crystals for the month of January.
Calculate Crystal Charm’s direct labor variances for the month of January.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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