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Calculate the direct materials price variance

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Reference no: EM132705828

Question - MARCESS Company has just developed a new product called "CessGo'. it uses standard cost system to help control costs. The standard cost per unit of CessGo was as follows:

Direct materials (2 lbs. P5 per meter) 10

Direct labor (.5 hr. @ P12 per hour) 6

Variable overhead (P6 per DLH) 3

Standard cost per unit 19

Actual results for the month ended August were given below:

Direct materials purchased (25,000 lbs.) 124,500

Direct materials used (20,000 lbs.) 99,600

Direct labor cost incurred 67,375

Total direct labor hours worked 5,390 DLH

Total machine hours 6,000 MH

Units produced 9,800

Required -

A. Calculate the direct materials price variance (at the time of purchased) and direct materials quantity variance.

B. Calculate the direct labor rate variance and direct labor efficiency variance.

C. Journal entry to close the variances to cost of goods sold.

Reference no: EM132705828

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