Amber Company produces iron table and chair sets. During October, Amber’s costs were as follows:Actual purchase price$ 1.70 per pound Actual direct labor rate$ 6.90 per hour Standard purchase price$ 1.50 per pound Standard quantity for sets produced910,000 pounds Standard direct labor hours allowed15,000 Actual quantity purchased in October1,055,000 pounds Actual direct labor hours11,000 Actual quantity used in October940,000 pounds Direct labor rate variance$4,950 f Calculate the total cost of purchases for October.Compute the direct materials price variance based on the actual quantity purchased.Calculate the direct materials quantity variance based on the actual quantity used.Compute the standard direct labor rate for October.Compute the direct labor efficiency variance for October.

Name: Amber Company produces iron table and chair sets. During October, Ambe
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Description: Amber Company produces iron table and chair sets. During October, Amber’s costs were as follows:Actual purchase price$ 1.70 per pound Actual direct labor rate$ 6.90 per hour Standard purchase price$ 1.50 per pound Standard quantity for sets produced9

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Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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Amber Company produces iron table and chair sets. During October, Amber’s costs were as follows:

Actual purchase price	$ 1.70 per pound
Actual direct labor rate	$ 6.90 per hour
Standard purchase price	$ 1.50 per pound
Standard quantity for sets produced	910,000 pounds
Standard direct labor hours allowed	15,000
Actual quantity purchased in October	1,055,000 pounds
Actual direct labor hours	11,000
Actual quantity used in October	940,000 pounds
Direct labor rate variance	$4,950 f

Calculate the total cost of purchases for October.
Compute the direct materials price variance based on the actual quantity purchased.
Calculate the direct materials quantity variance based on the actual quantity used.
Compute the standard direct labor rate for October.
Compute the direct labor efficiency variance for October.

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