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Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: $ 2.90 per lb. $ 8.10 per hour $ 2.70 per lb. 1,030,000 lbs. 21,000 1,275,000 lbs. 16,000 1,060,000 lbs. $6,080 F Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance Required: 1. Calculate the total cost of purchases for October. 2. Compute the direct materials price variance based on quantity purchased. 3. Calculate the direct materials quantity variance based on quantity used.

Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: $ 2.90 per lb. $ 8.10 per hour $ 2.70 per lb. 1,030,000 lbs. 21,000 1,275,000 lbs. 16,000 1,060,000 lbs. $6,080 F Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance Required: 1. Calculate the total cost of purchases for October. 2. Compute the direct materials price variance based on quantity purchased. 3. Calculate the direct materials quantity variance based on quantity used.

Cornerstones of Cost Management (Cornerstones Series)
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 Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed $ 2.90 per lb. $ 8.10 per hour $ 2.70 per lb. 1,030,000 1bs. 21,000 1,275,000 lbs. 16,000 1,060,000 lbs. $6,080 F Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance Required: 1. Calculate the total cost of purchases for October. 2. Compute the direct materials price variance based on quantity purchased. 3. Calculate the direct materials quantity variance based on quantity used. 4. Compute the standard direct labor rate for October. 5. Compute the direct labor efficiency variance for October.
Transcribed Image Text:Amber Company produces iron table and chair sets. During October, Amber's costs were as follows: Actual purchase price Actual direct labor rate Standard purchase price Standard quantity for sets produced Standard direct labor hours allowed $ 2.90 per lb. $ 8.10 per hour $ 2.70 per lb. 1,030,000 1bs. 21,000 1,275,000 lbs. 16,000 1,060,000 lbs. $6,080 F Actual quantity purchased in October Actual direct labor hours Actual quantity used in October Direct labor rate variance Required: 1. Calculate the total cost of purchases for October. 2. Compute the direct materials price variance based on quantity purchased. 3. Calculate the direct materials quantity variance based on quantity used. 4. Compute the standard direct labor rate for October. 5. Compute the direct labor efficiency variance for October.
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