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Question - Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material and direct labor. In 2015, DVO estimated the following standard costs for one of their most well-loved products, the DVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples.
Budgeted quantity
Budgeted price
Direct materials
2.0 pounds
$6.25 per pound
Direct labor
0.20 hours
$13.00 per hour
During September, DVO produced and sold 1,100 pies using 2,300 pounds of direct materials at an average cost per pound of $6.00 and 200 direct labor hours at an average wage of $13.25 per hour.
a) Determine the direct material price variance during September?
b) Determine the direct material efficiency variance during September?
c) Determine the direct labor price variance during September?
d) Determine the direct labor efficiency variance during September?
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