Answer:
a. Standard Quantity= 2250
b. Actual Quantity= 2570
c. Material Price Variance= 680 Fav
d. Total actual cost $ 10725
e. Labor price variance $ 325
Explanation:
Telephone Company
Direct Materials (All materials purchased were used)
Standard cost per roll: a 2250 pounds at $4.00 per pound
Total actual cost: b 2570 pounds costing $9600.
Actual unit Price = $ 9600/2570= $ 3.75
Standard cost allowed for units produced was $9000
Material Price Variance= (Actual Price * Actual Quantity)- (Standard Price * Actual Quantity)
Material Price Variance= (3.75*2570)- 4*2570= 9600- 10280= 680 Fav
Material yield variance is also called Material Efficiency variance = (Actual unit usage - Standard unit usage) x Standard cost per unit
$ 80= (Actual units- $ 9000/$4) *$4
$80 *4= (Actual units- 2250)
320+ 2250= Actual Units
Actual Units= 2570
Materials efficiency variance was $80 unfavorable.
Direct Manufacturing Labor
Standard cost is 3 hours per roll at $8.00 per hour
Actual cost per hour was $8.25
Total actual cost: 1300 hours * $8.25= $ 10725
Labor price variance: (actual hours* actual rate)- (actual hours * standard rate)
Labor price variance = $ 10725- 1300*8= $ 10725-$ 10400= $ 325
Labor efficiency variance was $400 unfavorable= Standard Hours *Standard Rate - Actual Hours *Standard Rate
400= (3*450*8)-(Actual Hours *8)
10800-400= (Actual Hours *8)
(Actual Hours) =10400/8= 1300
