Direct materials and direct labor variance analysis Jericho Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows: Standard number of lbs. of brass Standard price per lb. of brass Standard wage per hr. Standard labor time per faucet Actual price per lb. of brass 1.5 lbs. $11.00 $11.40 20 min. $11.25 Actual lbs. of brass used during the week 10,197 lbs. Number of faucets produced during the week 6,600 Actual wage per hr. Actual hrs. for the week (50 employees x 40 hours) $11.74 2,000 Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit Direct labor standard cost per unit Total standard cost per unit b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance
Direct materials and direct labor variance analysis Jericho Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 50 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows: Standard number of lbs. of brass Standard price per lb. of brass Standard wage per hr. Standard labor time per faucet Actual price per lb. of brass 1.5 lbs. $11.00 $11.40 20 min. $11.25 Actual lbs. of brass used during the week 10,197 lbs. Number of faucets produced during the week 6,600 Actual wage per hr. Actual hrs. for the week (50 employees x 40 hours) $11.74 2,000 Required: a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places. Direct materials standard cost per unit Direct labor standard cost per unit Total standard cost per unit b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Materials Price Variance Direct Materials Quantity Variance Total Direct Materials Cost Variance c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance Direct Labor Time Variance Total Direct Labor Cost Variance
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Direct materials and direct labor variance analysis
Jericho Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has
50 employees. Each employee presently provides 40 hours of labor per week. Information about a production week is as follows:
Standard number of lbs. of brass
Standard price per lb. of brass
Standard wage per hr.
Standard labor time per faucet
Actual price per lb. of brass
1.5 lbs.
$11.00
$11.40
20 min.
$11.25
Actual lbs. of brass used during the week
10,197 lbs.
Number of faucets produced during the week
6,600
Actual wage per hr.
Actual hrs. for the week (50 employees x 40 hours)
$11.74
2,000
Required:
a. Determine the standard cost per unit for direct materials and direct labor. Round the cost per unit to two decimal places.
Direct materials standard cost per unit
Direct labor standard cost per unit
Total standard cost per unit
b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Round
your answers to the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an
unfavorable variance as a positive number.
Direct Materials Price Variance
Direct Materials Quantity Variance
Total Direct Materials Cost Variance
c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Round your answers to
the nearest whole dollar. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a
positive number.
Direct Labor Rate Variance
Direct Labor Time Variance
Total Direct Labor Cost Variance
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