Direct manufacturing labor rate variance

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Reference no: EM13830824

Question 5

Expected production (units)	17,000
Standard DML hours per unit	8
Standard DML rate per hour	$22
Standard pounds of DM usage per unit	4
Standard DM price per pound	$15

	Actual
Units produced	16,000
DML hours worked	132,000
Total cost of DML	$2,640,000
Pounds of DM purchased	70,000
Total cost of DM purchased	$1,190,000
Pounds of DM used	62,000

a) Calculate the following variances:

Direct manufacturing labor rate variance

Direct manufacturing labor usage variance

Direct materials price variance

Direct materials usage variance

b) Explain what each of the calculated variances imply about the firm’s operations. Be specific!

Direct manufacturing labor rate variance

Direct manufacturing labor usage variance

Direct materials price variance

Direct materials usage variance

Reference no: EM13830824

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