In early 2009, JAX Inc. had budgeted for the production and sales of 6,000 units
ID: 2343624 • Letter: I
Question
In early 2009, JAX Inc. had budgeted for the production and sales of 6,000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit:Direct materials:
2 pounds at $3.00 per lb
Direct labor:
30 minutes of assembly at $.25 per minute
Actual results for 2009 were determined to be as follows:
Number of units produced
and sold:
6,800 units
Sales revenue:
$149,600 ($22 per unit)
Direct materials cost:
$ 43,384 (14,960 lbs purchased and used at $2.90 per lb)
Direct labor cost:
$ 59,024 (210,800 minutes at $.28 per minute)
What was JAX Inc.'s direct materials price variance for 2009?
Answer
a. $1,496F
b. $1,496U
c. $1,360F
d. $1,360U
3 points
Question 46
Refer to the JAX Inc. information above. What was JAX Inc.'s direct materials usage variance for 2009?
Answer
a. $4,080F
b. $4,080U
c. $2,584F
d. $2,584U
3 points
Question 47
Refer to the JAX Inc. information above. What was JAX Inc.'s direct labor rate variance for 2009?
Answer
a. $1,904F
b. $1,904U
c. $6,324F
d. $6,324U
3 points
Question 48
Refer to the JAX Inc. information above. What was JAX Inc.'s direct labor efficiency variance for 2009?
Answer
a. $1,700F
b. $1,700U
c. $6,120F
d. $6,120U
Explanation / Answer
Direct material price variance = (Standard Price -Actual Price) x Actual Quantity = (3 - 2.9) x 14960 = $1496 F Direct material usage variance = (Standard Quantity - Actual Quantity) x Standard Price = (6800 x 2 - 14960) x 3 = $4080 U Direct labour rate variance = (Standard rate - Actual rate) x Actual Minutes = (0.25 - 0.28) x 210800 = $6324 U Direct labour efficiency variance = (Standard minutes - Actual Minutes) x Standard Rate = (6800 * 30 - 210800) x 0.25 = $1700 U