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The answer to Material and Labor Variances
The Derry-O Company has the following standard cost for their product:
Direct materials 3 yards at $12.50 per yard $37.50 per unitDirect labor 2 hours at $9 per hour $18.00 per unit
During the prior year, the company produced 4,900 units and 15,000 yards of material were purchased and used in production at $12.40 per yard. The average labor rate was $9.10 and 10,050 hours were worked.
Required:
1. Calculate the direct material price variance.
2. Calculate the direct material usage variance.
3. Calculate the direct labor rate variance.
4. Calculate the direct labor efficiency variance.
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