Marv Company's direct labor costs for manufacturing its only product were as follows for October: Standard direct labor hours (DLHS) per unit of product Budgeted finished units for the period. Actual number of finished units produced Standard wage rate per direct labor hour (SP) Direct labor costs incurred. Actual wage rate per direct labor hour (AP) 2.0 7,400 5,500 $ 23.00 $ 262,500 $ 21.00

Marv Company's direct labor costs for manufacturing its only product were as follows for October: Standard direct labor hours (DLHS) per unit of product Budgeted finished units for the period. Actual number of finished units produced Standard wage rate per direct labor hour (SP) Direct labor costs incurred. Actual wage rate per direct labor hour (AP) 2.0 7,400 5,500 $ 23.00 $ 262,500 $ 21.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use this information to answer the question that follow.The following data relate to direct materials costs for February:Materials cost per yard: standard, $1.96; actual, $2.03Standard yards per unit: standard, 4.73 yards; actual, 5.21 yardsUnits of production: 9,100Calculate the direct materials price variance.
Selena Company applies overhead based on direct labor hours and has the following available for November: Standard: Direct labor hours (DLH) per unit Variable overhead per DLH Fixed overhead per DLH (based on 8,900 DLH) Actual Units produced Direct labor hours Variable overhead Fixed overhead 1,800 8,900 $6,400 $17,500 5 $0.75 $1.90 2. Compute all appropriate variances using the four-variance approach. (with SOLUTION)
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Required: a) Calculate the following variances for April, indicating whether each is favourable or unfavourable: i direct labour rate variance for each labour class. ii direct labour efficiency variance for each labour class. b) Discuss two advantages and two disadvantages of a standard costing system in which the standard direct labour rates per hour are not changed during the year to reflect events such as a new labour contract. (4 marks, maximum 150 wo
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