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Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 20X4, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.10 pounds $30 per pound
Direct labor 0.05 hours $15 per hour
During June RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour.
a. What is June’s direct material price variance?
standard price 30 acutal quantity 490
actual price 32 direct material 980 unfavorable
b. What is June’s direct material efficiency variance?
standard price 30 actual quantity 490
standard quality 500 direct material 300 favorable
c. What is June’s direct labor rate variance?
standard rate 15 actual hours 450
actual rate 15.25 manufactoring labor variance 62.50 unfavorable
d. What is June’s direct labor efficiency variance?
standard hours 250 standard rate 15
actual hours 250 maunfaturing varience 0

Sagot :

abiolataiwo2015

Answer:

A. 980 unfavorable

B. 300 favorable

C. 62.50 unfavorable

D. 0

Explanation:

A. Calculation to determine June’s direct material price variance

Using this formula

Direct material price variance=Actual quantity(Standard price -Actual price)

Let plug in the formula

Direct material price variance=490 ($32 - $30) Direct material price variance=980 U

B. Calculation to determine June’s direct material efficiency variance

Using this formula

Direct material efficiency variance=Standard price (Actual quantity-Standard quality)

Let plug in the formula

Direct material efficiency variance=$30 (490 – 500)

Direct material efficiency variance= 300 F

C. Calculation to determine June’s direct labor rate variance

Using this formula

Direct labor rate variance=standard hours(actual rate -standard rate )

Let plug in the formula

Direct labor rate variance =250 dlh ($15.25 - $15.00)

Direct labor rate variance = $62.50 U

D. Calculation to determine June’s direct manufacturing labor efficiency variance

Direct manufacturing labor efficiency variance=[250 dlh - (5,000 x 0.05)] x $15

Direct manufacturing labor efficiency variance = 0

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