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22 September, 09:39

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (6 pounds at $3.10 per pound) $18.60 Direct labor (4 hours at $10.00 per hour) $40.00 During the month of April, the company manufactures 190 units and incurs the following actual costs. Direct materials purchased and used (2,200 pounds) $7,260 Direct labor (770 hours) $7,623 Compute the total, price, and quantity variances for materials and labor. Total materials variance $enter a dollar amount select an option Materials price variance $enter a dollar amount select an option Materials quantity variance $enter a dollar amount select an option Total labor variance $enter a dollar amount select an option Labor price variance $enter a dollar amount select an option Labor quantity variance $enter a dollar amount select an option

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  1. 22 September, 10:08
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    standard rates:

    Direct materials (6 pounds at $3.10 per pound) $18.60

    SP = $3.10

    SQ = 6 lbs

    Direct labor (4 hours at $10.00 per hour) $40.00

    SR = $10

    SH = 4 hours

    actual usage for 190 units:

    Direct materials purchased and used (2,200 pounds) $7,260

    AP = $3.30

    AQ = 2,200 lbs

    Direct labor (770 hours) $7,623

    AR = $9.90

    AH = 770 hours

    Direct materials price variance = (AP - SP) x AQ = ($3.30 - $3.10) x 2,200 = $440 unfavorable

    Direct materials quantity variance = SP x (AQ - SQ) = $3.10 x (2,200 - 1,140) = $3,286 unfavorable

    Total direct materials variance = (AP x AQ) - (SP x SQ) = ($3.30 x 2,200) - ($3.10 x 1,140) = $3,726 unfavorable

    Direct labor price variance = (AR - SR) x AH = ($9.90 - $10) x 770 = - $77 favorable

    Direct labor quantity variance = SR x (AH - SH) = $10 x (770 - 760) = $100 unfavorable

    Total direct labor variance = (AR x AH) - (SR x SH) = ($9.90 x 770) - ($10 x 760) = $23 unfavorable
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