90.2K

Verified Solution

Link Copied!

Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit $14\mathrm{.}5.$ In a given month, the company used

$3,485$ pounds of aluminum to manufacture $927$ units. The company paid $$29\mathrm{.}20$ per pound during the month to purchase aluminum.

At the beginning of the month, the company had $57$ pounds of aluminum on hand. At the end of the month, the company had only

$37$ pounds of aluminum in its warehouse. Schmidt used $4,550$ direct labor hours during the month, at an average cost of $$42\mathrm{.}20$ per

hour.

Required:

Compute the following variances for the month:

The purchase price variance for aluminum. Indicate whether this variance is favorable or unfavorable.

The usage variance for aluminum. Indicate whether this variance is favorable or unfavorable.

The direct labor rate variance. Indicate whether this variance is favorable or unfavorable.

The direct labor efficiency variance. Indicate whether this variance is favorable or unfavorable.

$($Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.$)$Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit $14\mathrm{.}5.$ In a given month, the company used $3,485$ pounds of aluminum to manufacture $927$ units. The company paid $$29\mathrm{.}20$ per pound during the month to purchase aluminum. At the beginning of the month, the company had $57$ pounds of aluminum on hand. At the end of the month, the company had only $37$ pounds of aluminum in its warehouse. Schmidt used $4,550$ direct labor hours during the month, at an average cost of $$42\mathrm{.}20$ per hour.

Answer & Explanation Solved by verified expert

See Answer