A company's standard cost system requires 7,000 direct laborhours per month jg. qtler taproduce 3,500 units of handbags.The management has set 2 standard of using 4.3 yards ofdirect materials per unit of handbag. Information regardingstandard costs is mentioned below:ParticularsTotal standard direct materials costTotal standard direct labor costTotal standard variable manufacturing overhead(based on direct labor-hours)AmountParticularsTotal actual direct materials costTotal actual direct labor costTotal actual variable manufacturing overhead$54,250$42,000$18,200During November, the company produced 3,600 wits ofhandbags using 6 960 direct labor hours. Actual cots recordadisthe month of Novemb are ss allows:Amount$64,800$52,200$24,360The company used 21,600 yards of materials to produce 3,600unis of handbags. Materials purchased during the month wereused in production.Requirement: Determine the direct materials price variance anddirect labor eficiency vaiance. (Rousd all he ntemuedistecaleslations to 2 decimal places)Direct materials price variance is $9,504 U and direct labor efficiency variance is $1,440 U.Direct materials price variance is $3,640 U and direct labor efficiency variance is $240U.Direct materials price variance is $9,504 F and direct labor efficiency variance is $1,440 F.Direct materials price variance is $3640 F and direct labor efficiency variance is $240F.

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Description: A company's standard cost system requires 7,000 direct laborhours per month jg. qtler taproduce 3,500 units of handbags.The management has set 2 standard of using 4.3 yards ofdirect materials per unit of handbag. Information regardingstandard costs

Variance analysis is a tool used in management accounting. In this, we calculate the deviations of…

Answered: Requirement: Determine the direct…

Business

Accounting

Requirement: Determine the direct materials price variance and direct labor eficiency vaiance. (Rousd all he ntemuediste caleslations to 2 decimal places)

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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Subject-Acounting
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Lucia Company has set the following standard cost per unit for direct materials and direct labor. Direct materials (16 pounds @ $4 per pound) $ 64 Direct labor (3 hours @ $15 per hour) 45 During May the company incurred the following actual costs to produce 8,000 units. Direct materials (131,100 pounds @ $3.80 per pound). Direct labor (27,300 hours @ $15.10 per hour) 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. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Complete this question by entering your answers in the tabs below. Required 1 $ 498,180 412,230 Required 2
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