A company uses the following standard costs to produce a single unit of output.
ID: 2554658 • Letter: A
Question
A company uses the following standard costs to produce a single unit of output. Time Rur Attempt du 44 Minut 24/7 Proc Direct materials S5.40 6 pounds at S0.90 per pound 0.5 hour at $12.00 per hour 0.5 hour at $4.80 per hour S6.08 Livec S2.40 Phon Direct labor Manufacturing overhead During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56.350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10.400. Based on this information, the direct materials price variance for the month was:Explanation / Answer
1) Material price variance = (0.90-1)*58000 = 5800 Unfavourable
2) Direct labour cost variance is dividend into price and quantity variance which are almost called controllable and volume variance is true.