The following data relates to Merrick Ltd., a single productcompany who manufactures vaccines:
Variances for October:
DIRECT MATERIAL QUANTITY VARIANCE 2400UNFAVORABLE
MATERIALS VARIANCE (TOTAL) 600FAVORABLE
DIRECT LABOR EFFICIENCY VARIANCE 9000FAVORABLE
Actual materials and labor costs forOctober:
| Direct materials purchased: 6,000 pounds @ $5.50 per pound | $33,000 |
| Direct labor cost: ? hours @ ? per hour | $57,000
|
Materials and labor standards to manufacture oneunit of vaccine:
| Quantity/hours | Price/rate | Standard cost |
| Direct materials | ? pounds | ? per pounds | ? pounds |
| Direct labor | 2.5 hours | $18 per hour | $45 |
Merrick Ltd. manufactured and sold 1,400 units of vaccinesduring October. There were no materials and finished goodsinventories at the start and end of the October.
Required:
- Compute standard price per pound of materials.
- Compute standard quantity of materials allowed for actualproduction.
- Compute standard quantity of direct materials allowed for oneunit of product.
- Compute actual direct labor cost per hour for October.
- Compute direct labor rate variance and indicate whether it isfavorable or unfavorable.
