Direct Materials and Direct Labor Variance Analysis Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 60 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows: Standard wage per hr. $11.40 Standard labor time per faucet 10 min. Standard number of lb. of brass 1.70 lb. Standard price per lb. of brass $12.75 Actual price per lb. of brass $13.00 Actual lb. of brass used during the week 11,600 lb. Number of faucets produced during the week 6,600 Actual wage per hr. $11.70 Actual hrs. per week 1,920 hrs. Required: a.  Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places. b.  Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. c.  Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 1PA: Shasta Fixture Company manufactures faucets in a small manufacturing facility. The faucets are made...
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Direct Materials and Direct Labor Variance Analysis

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 60 employees. Each employee presently provides 32 hours of labor per week. Information about a production week is as follows:

Standard wage per hr. $11.40
Standard labor time per faucet 10 min.
Standard number of lb. of brass 1.70 lb.
Standard price per lb. of brass $12.75
Actual price per lb. of brass $13.00
Actual lb. of brass used during the week 11,600 lb.
Number of faucets produced during the week 6,600
Actual wage per hr. $11.70
Actual hrs. per week 1,920 hrs.

Required:

a.  Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.

b.  Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

c.  Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

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