70.2K

Verified Solution

Link Copied!

Direct Materials and Direct Labor Variance Analysis

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 40 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Standard wage per hr.	$10.80
Standard labor time per faucet	20 min.
Standard number of lb. of brass	1.40 lb.
Standard price per lb. of brass	$10.75
Actual price per lb. of brass	$11.00
Actual lb. of brass used during the week	13,000 lb.
Number of faucets produced during the week	9,000
Actual wage per hr.	$11.10
Actual hrs. per week	1,440 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.

Direct materials standard cost per faucet Direct labor standard cost per faucet Total standard cost per faucet

Answer & Explanation Solved by verified expert

See Answer