Explain what each of the calculated variances imply

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Reference no: EM13496338

Question #

Expected production (units)

15,000

Standard DML hours per unit

7

Standard DML rate per hour

$26

Standard pounds of DM usage per unit

3

Standard DM price per pound

$14

 

 


Actual

Units produced

16,000

Pounds of DM purchased

53,000

Total cost of DM purchased

$689,000

Pounds of DM used

50,000

DML hours worked

106,000

Total cost of DML

$2,968,000

 

a) Calculate the following variances:

Direct manufacturing labor rate variance

Direct manufacturing labor usage variance

Direct materials price variance (how we did it in the chat session)

Direct materials usage variance

b) Explain what each of the calculated variances imply about the firm's operations. Be specific!

Direct manufacturing labor rate variance

Direct manufacturing labor usage variance

Direct materials price variance

Direct materials usage variance

 

Reference no: EM13496338

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