Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (14 lbs. @ $4 per lb.) Direct labor (3 hrs. @ $15 per hr.) During June the company incurred the following actual costs to produce 8,800 units. Direct materials (125,500 lbs. @ $3.80 per lb.) Direct labor (30,600 hrs. @ $15.10 per hr.).. AH-Actual Hours SH - Standard Hours AR-Actual Rate SR Standard Rate AQ-Actual Quantity SQ-Standard Quantity AP Actual Price SP- Standard Price Required 1 Required 2 (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) C AG $56 45 Compute the diff materials prible and quantity variances. Indicate whether each variance is favorable or unfavorable. Standard Cost Actual Cost 0 $ $476,900 462,060 0 0 $ 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.
Direct materials (14 lbs. @ $4 per lb.)
Direct labor (3 hrs. @ $15 per hr.)
During June the company incurred the following actual costs to produce 8,800 units.
Direct materials (125,500 lbs. @ $3.80 per lb.)
Direct labor (30,600 hrs. @ $15.10 per hr.)..
AH-Actual Hours
SH - Standard Hours
AR-Actual Rate
SR Standard Rate
AQ-Actual Quantity
SQ-Standard Quantity
AP Actual Price
SP- Standard Price
(1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable,
unfavorable, and no variance.)
(2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting
for favorable, unfavorable, and no variance.)
C
$56
45
Required 1 Required 2
Compute the di materials prible and quantity variances. Indicate whether each variance is favorable or unfavorable.
Actual Cost
Standard Cost
AG
0
$
$476,900
462,060
0
0
$ 0
Transcribed Image Text:Reed Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures. Direct materials (14 lbs. @ $4 per lb.) Direct labor (3 hrs. @ $15 per hr.) During June the company incurred the following actual costs to produce 8,800 units. Direct materials (125,500 lbs. @ $3.80 per lb.) Direct labor (30,600 hrs. @ $15.10 per hr.).. AH-Actual Hours SH - Standard Hours AR-Actual Rate SR Standard Rate AQ-Actual Quantity SQ-Standard Quantity AP Actual Price SP- Standard Price (1) Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) (2) Compute the direct labor rate variance and the direct labor efficiency variance. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) C $56 45 Required 1 Required 2 Compute the di materials prible and quantity variances. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cost AG 0 $ $476,900 462,060 0 0 $ 0
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