Reference no: EM133164518
Question - Company A has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity.
Per Unit
Direct materials (6 lbs. @ $2.00/lb.) $12.00
Direct labor (1 hrs. @ $8.00/hr.) 8.00
During the last period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were:
Direct materials (760,000 lbs.) $1,558,000
Direct labor (126,000 hrs.) 1,014,300
Required -
a) Determine the direct materials price and quantity variances. Show all calculations.
b) Determine the direct labor rate and efficiency variances. Show all calculations.
Clearly indicate whether each of the four variances is favorable or unfavorable. Do not abbreviate F and U, write each word out.