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Madzinga's Draperies manufactures curtains. A certain window requires the following: Direct materials standard 9 square yards at $5 per yard Direct manufacturing labor standard 5 hours at $10 During the second quarter, the company made 1,500 curtains and used 14,000 square yards of fabric costing $69,300. Direct labor totaled 7,600 hours for $80,560.
Required:
a. Compute the direct materials price and efficiency variances for the quarter.
b. Compute the direct manufacturing labor price and efficiency variances for the quarter.

Sagot :

facundobuzzetti

Answer:

Results are below.

Explanation:

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (5 - 4.95)*14,000

Direct material price variance= $700 favorable

Actual price= 69,300 / 14,000= $4.95

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Direct material quantity variance= (9*1,500 - 14,000)*5

Direct material quantity variance=  $2,500 unfavorable

To calculate the direct labor rate and efficiency variance, we need to use the following formulas:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor time (efficiency) variance= (5*1,500 - 7,600)*10

Direct labor time (efficiency) variance= $1,000 unfavorable

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Direct labor rate variance= (10 - 10.6)*7,600

Direct labor rate variance= $4,560 unfavorable

Actual rate= 80,560 / 7,600= $10.6

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