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During June, Danby Company's material purchases amounted to 7,000 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 1,500 units were as follows: Direct labor: Direct material: $ 119,325 Direct Labor: $ 36,000 The standards for one unit of Danby Company's product are as follows: Quantity, 4 hours per unit ($18.50 per hour) Rate, $18.40 per hour ($7.50 per pound) Direct Material: Quantity, 3 pounds per unit Price, $7.20 per pound Required: Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct- labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

During June, Danby Company's material purchases amounted to 7,000 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 1,500 units were as follows: Direct labor: Direct material: $ 119,325 Direct Labor: $ 36,000 The standards for one unit of Danby Company's product are as follows: Quantity, 4 hours per unit ($18.50 per hour) Rate, $18.40 per hour ($7.50 per pound) Direct Material: Quantity, 3 pounds per unit Price, $7.20 per pound Required: Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct- labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...
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During June, Danby Company's material purchases amounted to 7,000 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 1,500 units were as follows: Direct labor: Direct material: $ 119,325 Direct Labor: $ 36,000 The standards for one unit of Danby Company's product are as follows: Quantity, 4 hours per unit ($18.50 per hour) Rate, $18.40 per hour ($7.50 per pound) Direct Material: Quantity, 3 pounds per unit Price, $7.20 per pound Required: Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct- labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
Transcribed Image Text:During June, Danby Company's material purchases amounted to 7,000 pounds at a price of $7.50 per pound. Actual costs incurred in the production of 1,500 units were as follows: Direct labor: Direct material: $ 119,325 Direct Labor: $ 36,000 The standards for one unit of Danby Company's product are as follows: Quantity, 4 hours per unit ($18.50 per hour) Rate, $18.40 per hour ($7.50 per pound) Direct Material: Quantity, 3 pounds per unit Price, $7.20 per pound Required: Compute the direct-material price and quantity variances, the direct-material purchase price variance, and the direct- labor rate and efficiency variances. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)
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