Determine the direct materials price variance

Reference no: EM131018633

Question:

Direct Materials, Direct Labor, and Factory Overhead Cost Variance AnalysisEastern Polymers, Inc., processes a base chemical into plastic. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 6,000 units of product were as follows:

	Standard Costs		Actual Costs
Direct materials	7,800 lbs. at $5.80		7,700 lbs. at $5.60
Direct labor	1,500 hrs. at $18.50		1,530 hrs. at $18.8
Factory overhead	Rates per direct labor hr.,
	based on 100% of normal
	capacity of 1,560 direct
	labor hrs.:
		Variable cost, $4.10	$6,090 variable cost
		Fixed cost, $6.50	$10,140 fixed cost

Each unit requires 0.25 hour of direct labor.

Required:

a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Price variance	$ ________	Favorable or Unfavorable
Quantity variance	$ ________	Favorable or Unfavorable
Total direct materials cost variance	$ ________	Favorable or Unfavorable

b. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Rate variance	$ ________	Favorable or Unfavorable
Time variance	$ ________	Favorable or Unfavorable
Total direct labor cost variance	$ ________	Favorable or Unfavorable

c. Determine variable factory overhead controllable variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Variable factory overhead controllable variance	$ ________	Favorable or Unfavorable
Fixed factory overhead volume variance	$ ________	Favorable or Unfavorable
Total factory overhead cost variance	$ ________	Favorable or Unfavorable

Reference no: EM131018633

Questions Cloud

Explain the benefits within an organizational staffing plan : Choose two staffing levels from those identified below and Give an example of each and explain the benefits within an organizational staffing plan.

What communication styles do you use to influence others : What feedback do you get from others about their perception of you? What have you learned about your conflict management styles and when to use them?

Have there been any controversies related to the problem : The process of preparing a problem statement begins with identifying the general topic or problem, just as you do with any paper. You then expand upon it by asking the five W's and H questions: Who does it affect or not affect? What does it affect..

How do both external and internal analysis impact : How do both external and internal analysis impact short-term and long-term organizational goals? How is this translated in a company's strategic choice?

Determine the direct materials price variance : Direct Materials, Direct Labor, and Factory Overhead Cost Variance AnalysisEastern Polymers, Inc., processes a base chemical into plastic.

The international labor organization : The International Labor Organization (ILO) is a United Nations agency that promotes internationally recognized human rights for workers, including the right for workers to organize and the abolition of forced labor. The ILO's efforts include the coll..

The american federation of labor-congress : The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) is a voluntary federation of American unions representing about 13 million employees worldwide. Visit the AFL-CIO's website (http://www.aflcio.org). Click on "What Unions..

What are the possible diagnoses for his knee pain : John is training for a marathon and recently he has been experiencing knee pain. He subsequently went to the doctor for a diagnosis. What are the possible diagnoses for his knee pain? What is the structure and function of the synovial joint of the ..

Potential problems associated with the self-service : Please respond in full detail sentences. What are some of the potential problems associated with the self-service concept? After sharing some problems facing self-service, how would you address those problems? What benefits would you add to those al..

User Account

All Pages