Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Sawyer Industries, Inc. (SII), developed standard costs for
direct material and direct labor. In 2011, SII estimated the
following standard costs for one of their major products,
the 30-gallon heavy-duty plastic container.
Budgeted quantity Budgeted price
Direct materials 0.20 pounds
Direct labor
0.10 hours
$25 per pound
$15 per hour
During July, SII produced and sold 5,000 containers using
1,100 pounds of direct materials at an average cost per
pound of $24 and 525 direct manufacturing labor hours
at an average wage of $14.75 per hour.
July's direct material efficiency variance is:
A. $1,400 unfavorable
B. $1,100 favorable
C. $2,500 unfavorable
D. None of these answers are correct
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Transcribed Image Text:Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container. Budgeted quantity Budgeted price Direct materials 0.20 pounds Direct labor 0.10 hours $25 per pound $15 per hour During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour. July's direct material efficiency variance is: A. $1,400 unfavorable B. $1,100 favorable C. $2,500 unfavorable D. None of these answers are correct
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