Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of...
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Saskatewan Can Company manufactures recyclable soft-drink cans. A unit of production is a case of 12 dozen cans. The following standards have been set by the production-engineering staff and the controller. Direct Labor Direct Material: Quantity, 0.10 hour Rate, $5.00 per hour Quantity, 3 kilograms Price, $0.30 per kilogram Actual material purchases amounted to 34,000 kilograms at $0.325 per kilogram. Actual costs incurred in the production of 10,000 units were as follows: Direct labor: Direct material: $6,120 for 1,200 hours $10,075 for 31,000 kilograms Required 1. Use the variance formulas to compute the direct-material price and quantity variances, the direct-material purchase price variance and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance)) Direct-material price variance Direct-material quantity variance Direct-material purchase price variance Direct-labor rate variance Direct-labor efficiency variance
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