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Problem - Direct materials and direct labor variance analysis
Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets made from zinc. Manufacturing has 60 employees. Each employee presently provides 36 of labor per week. Information about a production week is as follows:
Standard wage per hr.
$18.00
Standard labor time per faucet
12 min.
Standard number of lbs. of zinc
0.80 lb.
Standard price per lb. of zinc
$1.25
Actual price per lb. of zinc
$1.40
Actual lbs. of zinc used during the week
10,200 lbs.
Number of faucets produced during the week
12,000
Actual wage per hr.
$18.75
Actual hrs. per week
2,160 hrs.
Instructions - Determine (a) the standard cost per unit for direct materials and direct labor; (b) the price variance, quantity variance, and total direct materials cost variance; and (c) the rate variance, time variance, and total direct labor cost variance.
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