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Calculate the raw materials purchase price variance

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Reference no: EM132618161

Question - The standards for one carton of Flavor Rite are:

Direct materials 3.2 lbs. @ $6.00/lb.Direct labor 2.4 hrs. @ $10.00/hr.

During the week ended May 17, the following activity took place:

4,800 lbs. of raw material were purchased for inventory at a cost of $5.60 per pound;

1,200 cartons of finished product were produced;

4,020 lbs. of raw material were used;

3,110 labor hours were worked at a total cost of $26,435.

Required - Calculate each of the following variances:

(a) Raw materials purchase price variance.

(b) Raw materials usage variance.

(c) Direct labor rate variance.

(d) Direct labor efficiency variance.

(e) Explain the factors that most likely caused the variances computed above.

Reference no: EM132618161

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