Check my work Orion Corporation has established the following standards for the
ID: 2508549 • Letter: C
Question
Check my work Orion Corporation has established the following standards for the prime costs of one unit of its chief product, dartboards Standard OuantityStandard Price or Rate Standard cost Direct material Direct labor Total 8.00 pounds 1.60 hour $2.40 per pound $9.00 per hour $19.20 33.60 During June, Orion purchased 208,000 pounds of direct material at a total cost of $526,240. The total wages for June were $394,450 90 percent of which were for direct labor. Orion manufactured 23,000 dartboards during June, using 165,600 pounds of the direct material purchased in June and 40,250 direct-labor hours. Required Compute the following variances for June. (Do not round intermediate calculations.Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance 1. Direct-material price variance 2. Direct-material quantity variance 3. Direct-material purchase price variance 4. Direct-labor rate variance 5. Direct-labor efficiency variance Unfavorable Favorable Unfavorable Favorable avorableExplanation / Answer
Orion Actual price = 526240/208000= 2.53 1) Direct material price variance (Actual price - standard price)*AQ used (2.53-2.4)*165600 21528 U 2) Direct material quantity variance (AQ used - std qty allowed)*standard rate (165,600 - 23000*8)*2.4 44,160 F 3) Direct material purchase price variance (Actual price - standard price)*AQ purchased (526240 - 2.4*208000) 27040 U 4) direct labor = 394,450*90% 355005 Rate per hour = 355005/40,250 8.82 direct labor rate variance (Actual rate - standard rate)*actual hours (8.82 - 9)*40,250 7245 F 5) Direct labor Efficiency variance (actual hours - standard hrs allowed)*standard rate (40,250 - 23000*1.60)*9 31050 U Danby direct mateirals used = 37920/7.90= 4800 pounds Actual direct labor hrs=131,835/18.70= 7050 direct labor hrs 1) Direct material price variance (Actual price - standard price)*AQ used (7.90 - 7.60)*4800 1440 U 2) Direct material quantity variance (AQ used - std qty allowed)*standard rate (4800 - 2300*2)*7.60 1,520 U 3) Direct material purchase price variance (Actual price - standard price)*AQ purchased (7.90 - 7.60)*6600 1980 U 4) direct labor rate variance (Actual rate - standard rate)*actual hours (18.70 - 18.60)*7050 705 U 5) Direct labor Efficiency variance (actual hours - standard hrs allowed)*standard rate (7070 - 2300*3)*18.60 3162 U