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Exercise 8-11 Direct materials and direct labor variances LO P2

Hutto Corp. has set the following standard direct materials and direct labor costs per unit for the product it manufactures.

Direct materials (16 lbs. @ $4 per lb.)			$64
Direct labor (3 hrs. @ $15 per hr.)			45

During May the company incurred the following actual costs to produce 8,100 units.

Direct materials (133,100 lbs. @ $3.80 per lb.)		$	505,780
Direct labor (27,500 hrs. @ $15.10 per hr.).			415,250

AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate (1) Compute the direct materials price and quantity variances. (2) Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable.

Complete this question by entering your answers in the tabs below. Required Required 2 Compute the direct materials price and quantity variances and classify it as favorable or unfavorable. Actual Cost Standard Cost AQ AP SQ AQ SP SP 0 Favorable Direct materials price variance Direct materials quantity variance 0 (Unfavorable Total direct materials variance avorable Required 2 Required1 Compute the direct labor rate variance and the direct labor efficiency variance. Indicate whether each variance is favorable or unfavorable. Actual Cost Standard Cost SR SH SR AH AR AH 0 0 Direct labor rate variance O Unfavorable Direct labor efficiency variance O Unfavorable Total direct labor variance nfavorable

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