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Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an average of 10,000 units each month. The factory standards are 20,000 hours of direct labor and 10,000 pounds of materials for this volume. The standard cost of direct labor is $ 9.00 per hour, and the standard cost of materials is $4.00 per pound. The standard factory overhead at this level of production is $20,000. During the current month the production and cost reports reflected the following information : None Beginning units in process.. 9,500 Units finished... None Units in process, end of month 20,000 Direct labor hours worked... 10,000 Pounds of material purchased 9,400 Pounds of materials used. $ 178,000 Cost of direct labor $ 42,000 Cost of materials purchased. On the basis of this information : 1. Prepare a standard cost summary . 2. Calculate the materials ( use the materials purchase price vari- ance) and labor cost variances , and indicate whether they are favorable or unfavorable , using the formulas on pages 421- 422 and 424.

Standard cost summary; materials and labor cost variances Perkins Processors Inc. produces an average of 10,000 units each month. The factory standards are 20,000 hours of direct labor and 10,000 pounds of materials for this volume. The standard cost of direct labor is $9.00 per hour, and the standard cost of materials is $4.00 per pound. The standard factory overhead at this level of production is $20,000. During the current month the production and cost reports reflected the following information: On the basis of this information: 1. Prepare a standard cost summary. 2. Calculate the materials (use the materials purchase price variance) and labor cost variances, and indicate whether they are favorable or unfavorable, using the formulas on pages 421422 and 424

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