Cooley Company manufactures components for another manufacturer. It uses one direct material A1, and processes...
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Cooley Company manufactures components for another manufacturer. It uses one direct material A1, and processes each material using its factory direct labor to make one unit of product C100 that is sold to another manufacturer. C100 has the following direct materials (DM) and direct labor hours (DLH) standards. Standards 1. Materials usage per completed unit C100 >A1: 2 pounds at $4.00 per pound 2. Processing times per completed unit C100 >A1: 30 minutes direct labor per pound at $12.00 per hour In October, Cooley completed 8,000 units of C100. It's actual costs were as follows: > A1: DM of 16,500 pounds at a cost of $62,700 [Hint: average actual cost per pound?] > A1: DLH of 8,100 hours at a cost of $99,630 [Hint: average actual cost per hour?] REQUIRED: Compute the following variances. 1. Materials price variance for A1. 2. Materials quantity (or usage) variance for A1 3. Total direct materials variance. 4. Labor price (or rate) variance for A1 5. Labor quantity (or efficiency) variance for A1 6. Total direct labor variance.
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