C & H Corp. uses a standard cost system, manufactured 18,000 bumper cars during 2021 using 148,000 square feet of rubber purchased at $1.05 per square foot. Production required 402 direct labor hours costing $15 per hour. The direct materials standard was 7 square feet of rubber per car, at a cost of 1.15 per square foot. The labor standard was 0.025 direct labor hours per car, at a standard cost of $11. Calculate the direct materials efficiency variance.

C & H Corp. uses a standard cost system, manufactured 18,000 bumper cars during 2021 using 148,000 square feet of rubber purchased at $1.05 per square foot. Production required 402 direct labor hours costing $15 per hour. The direct materials standard was 7 square feet of rubber per car, at a cost of 1.15 per square foot. The labor standard was 0.025 direct labor hours per car, at a standard cost of $11. Calculate the direct materials efficiency variance.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter5: Probability: An Introduction To Modeling Uncertainty

Section: Chapter Questions

Problem 19P

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Question

C & H Corp. uses a standard cost system, manufactured 18,000 bumper cars during 2021 using 148,000 square feet of rubber purchased at $1.05 per square foot. Production required 402 direct labor hours costing $15 per hour. The direct materials standard was 7 square feet of rubber per car, at a cost of 1.15 per square foot. The labor standard was 0.025 direct labor hours per car, at a standard cost of $11.

Calculate the direct materials efficiency variance.

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SQ)
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SC
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11
Direct
Materials
Efficiency
Variance
Favoral
Unfavo

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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