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Calculate the materials price variance

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Reference no: EM131164016

Problem - Wright Industry Inc. uses a standard cost system in which direct materials inventory is carried at standard cost. Wright has established the following standards for the prime costs of one unit of products.

 

Standard Qty

Standard Price

Standard Cost/unit

Direct material

8 pounds

$1.80 per pound

$14.40

Direct labor

0.25 hour

$8 per hour

$2.00

Variable overhead

0.5 hours

$2 per hour

 

During May, the company purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Wright manufacturing 19,000 units of product using 142,500 pounds of direct material and 5,000 direct labor-hours.

a) Calculate the materials price variance.

b) Calculate the materials quantity variance.

c) Calculate the direct labor rate variance.

d) Calculate the direct labor efficiency variance.

Reference no: EM131164016

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