Solution-What favorable cost variance and unfavorable cost

What favorable cost variance and unfavorable cost variance

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Reference no: EM132590575

ABC Manufacturing has developed the following standards for one of its products:

Standards Per Unit

Direct materials:

Allowed to use 10 meters/unit

Price RM 10/meter

Direct Labor:

Hours allowed 4 hours/unit

Labor rate RM 10/hour

Below were actual activities for the month of August:

Material purchased 16,000 meters @ RM 10.60 per meter

Material used 12,500 meters

Direct labor worked 4,600 direct labor hours @ RM 15.80 per hour

Units produced 1,200 units

Question A. Calculate the materials price variance and indicate whether it is favorable or unfavorable.

Question B. Calculate the materials usage variance and indicate whether it is favorable or unfavorable.

Question C. Calculate the labor rate variance and indicate whether it is favorable or unfavorable.

Question D. Calculate the labor efficiency variance and indicate whether it is favorable or unfavorable.

Question E. Explain what favorable cost variance and unfavorable cost variance means.

Reference no: EM132590575

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What favorable cost variance and unfavorable cost variance

Reference no: EM132590575

Reference no: EM132590575

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