a) During June, Spencer Company’s material purchases amounted to 6,000 pounds at a price of $7.30 per pound. Actual costs incurred in the production of 2,000 units were as follows: Direct Labour: $116,745 ($18.10 per hour) Direct Materials: $ 30,660 ($ 7.30 per pound) The standards for one unit of Spencer Company’s product are as follows: Direct Labour Direct Material Quantity, 3 hours per unit Quantity, 2 pounds per unit Rate, $18 per hour Price, $7 per pound Compute the direct-material price and quantity variances and the direct-labour rate and efficiency variances. Indicate whether each variance is favourable or unfavourable
a) During June, Spencer Company’s material purchases amounted to 6,000 pounds at a price of $7.30 per pound. Actual costs incurred in the production of 2,000 units were as follows: Direct Labour: $116,745 ($18.10 per hour) Direct Materials: $ 30,660 ($ 7.30 per pound) The standards for one unit of Spencer Company’s product are as follows: Direct Labour Direct Material Quantity, 3 hours per unit Quantity, 2 pounds per unit Rate, $18 per hour Price, $7 per pound Compute the direct-material price and quantity variances and the direct-labour rate and efficiency variances. Indicate whether each variance is favourable or unfavourable
Chapter5: Process Costing
Section: Chapter Questions
Problem 6PA: Narwhal Swimwear has a beginning work in process inventory of 13,500 units and transferred in...
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Question
a) During June, Spencer Company’s material purchases amounted to 6,000 pounds
at a price of $7.30 per pound. Actual costs incurred in the production of 2,000
units were as follows:
Direct Labour: $116,745 ($18.10 per hour)
Direct Materials: $ 30,660 ($ 7.30 per pound)
The standards for one unit of Spencer Company’s product are as follows:
Direct Labour Direct Material
Quantity, 3 hours per unit Quantity, 2 pounds per unit
Rate, $18 per hour Price, $7 per pound
Compute the direct-material price and quantity variances and the direct-labour
rate and efficiency variances. Indicate whether each variance is favourable or
unfavourable
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