Direct materials quantity variance

Assignment Help Accounting Basics

Reference no: EM13114697

Cost Elements Standard Quality Standard Price Stand Cost

Direct materials 4 hours $5 $20

Direct labor 2 hours 10 20

Variable overhead 2 hours 4 8

Fixed overhead 2 hours 2 4

$52

The company expected to work at the 60,000 direct labor hours level of activity and produce 30,000 units of product.

Actual results were as follows.

28,400 units of product were actually produced.
Direct labor costs were $546,000 for 56,000 direct labor hours actually worked.
Actual direct materials purchased and used during the year cost $554,400 for 115,500 pounds.
Total actual manufacturing overhead costs were $340,000

Compute the following variances and indicate whether the variance is favorable or unfavorable.

1. Direct material price variance

2. Direct materials quantity variance

3. Direct labor price variance

4. Direct labor quantity variance

Reference no: EM13114697

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