Reference no: EM132183475
Question - What is the process in finding Materials Price Variance, Materials Quantity Variance, and Total Materials Variance with the following information?
|
Materials
|
|
Item
|
Per Unit
|
Cost
|
|
Metal
|
1 lb.
|
63¢ per lb.
|
|
Plastic
|
12 oz.
|
$1.00 per lb.
|
|
Rubber
|
4 oz.
|
88¢ per lb.
|
|
Direct labor
|
|
Item
|
Per Unit
|
Cost
|
|
Labor
|
15 min.
|
$8.00 per hr.
|
Predetermined overhead rate based on direct labor hours = $4.28.
The January figures for purchasing, production, and labor are:
The company purchased 229,000 pounds of raw materials in January at a cost of 78t a pound.
Production used 229,000 pounds of raw materials to make 115,500 units in January.
Direct labor spent 18 minutes on each product at a cost of $7.80 per hour.
Overhead costs for January totaled $54,673 variable and $73,800 fixed.