Price variance-quantity variance relating to direct material

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Reference no: EM131457737

Nolan Mills uses a standard cost system. During May, Nolan manufactured 15,000 pillowcases, using 26,900 yards of fabric costing $3.05 per yard and incurring direct labor costs of $18,560 for 3,200 hours of direct labor. The standard cost per pillowcase assumes 1.75 yards of fabric at $3.10 per yard, and 0.20 hours of direct labor at $5.95 per hour.

a. Compute both the price variance and quantity variance relating to direct materials used in the manufacture of pillowcases in May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

Materials Price variance _______________ _________________

Materials Quantity Variance _________________ _____________________

b. Compute both the rate variance and efficiency variance for direct labor costs incurred in manufacturing pillowcases in May. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round your answers to 2 decimal places.)

Labor Rate Variance __________________ ____________________

Labor efficency Variance _________________ ___________________

Reference no: EM131457737

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