60.1K

Verified Solution

Link Copied!

Johnston Company has a standard costing system and keeps all its costs up to date. The company's main product is cotton bed sheets, which are made in a single department. The standard variable costs for one unit of product are as follows:

Direct materials (3 yards at $12.00 per yard)	$36.00
Direct labor (2 hours at $9.00 per hour)	18.00
Variable overhead (2 hours @ $5.00 per direct labor hour)	10.00
Standard variable cost per unit	$64.00

During the year, it produced and sold 4,900 units and it purchased 15,000 yards of direct materials; the purchase cost was $11.80 per yard. The average labor rate was $9.20 per hour, and 10,100 direct labor hours were worked. Using the data given, compute the following:

1. Direct materials cost variances:

a. Direct materials price variance $ _________ Direct materials price variance F=Favorable or U = Unfavorable _________

b. Direct materials quantity variance $ _________ Direct materials quantity variance F=Favorable or U = Unfavorable___________

c. Total direct materials cost variance $__________nDirect materials cost variance F=Favorable or U = Unfavorable_______________

2. Direct labor cost variances:

a. Direct labor rate variance $ _______ Direct labor rate variance . F=Favorable or U = Unfavorable __________

b. Direct labor time variance $ ________Direct time variance F=Favorable or U = Unfavorable __________

c. Total direct labor cost variance $________Direct labor cost variance F=Favorable or U = Unfavorable __________

Answer & Explanation Solved by verified expert

See Answer