In the table given below, reconstruct the remaining information using the availa
ID: 2714793 • Letter: I
Question
In the table given below, reconstruct the remaining information using the available data. [ WHERE THE X's ARE] All of the raw material purchased during the period was used in production. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round "Standard Quantity per Unit of Output" to 2 decimal places.)
Direct Material Direct Labor Standard price or rate per unit of input $21 per pound X per hour Standard quantity per unit of output X pounds per unit X hours per unit Actual quantity used per unit of output X pounds per unit 2.20 hours Actual price or rate per unit of input $19 per pound $14 per hour Actual output 12,000 units 12,000 units Standard input quantity allowed 44,400 pounds X hours Direct-material purchase price variance $94,800 F Direct-material quantity variance X X Direct-labor rate variance X X Direct-labor efficiency variance $62,400 F Total direct-labor variance $36,000 FExplanation / Answer
1. Calculation of Standard quantity per unit of output:
Standard quantity per unit of output = Standard Quantity Allowed / Actual Output
= 44400 Pounds / 12000 Units
= 3.70 Pounds Per unit
2.Calculation of Actual quantity used per unit of output:
Given that :
Direct-material purchase price variance = $94800 F = -94800
Direct-material purchase price variance = (Actual Price – Standard Price ) * Actual Quantity
(19 – 21) * Actual Quantity = -94800
Actual Quantity = -94800 / -2 = 47400 Pounds
Now Actual quantity used per unit of output = Actual Quantity / Actual Output
= 47400 Pounds / 12000 Units = 3.95 Pounds Per unit
3. Calculation of Direct-material quantity variance:
Direct-material quantity variance = (Actual Quantity – Standard Quantity ) * Standard Price
= (47400 – 44400) *21
= $63000 Unfavorable
4. Calculation of Direct-labor rate variance:
Direct-labor rate variance = Total direct-labor variance -Direct-labor efficiency variance
=36000 F – 62400 F = 26400 Unfavorable
5. Calculation of Standard rate per hour:
We know that :
Direct-labor rate variance = 26400 Unfavorable = 26400
Direct-labor rate variance = (Actual Rate – Standard rate)* Actual Hours
Hence ,
(14 - Standard rate)* (12000 units &*2.20 hours) = 26400
(14 - Standard rate)* 26400 =26400
(14 - Standard rate) = 26400 /26400
(14 - Standard rate)= 1
Hence , Standard rate =14-1 = $13 Per Hour
6. Calculation of Standard hours allowed:
Given that :
Direct-labor efficiency variance = 62400 F = -62400
Direct-labor efficiency variance = (Actual Hours – Standard Hours)* Standard Rate
Hence,
(26400 - Standard Hours) *13 = -62400
(26400 - Standard Hours) = -62400/13
(26400 - Standard Hours) = -4800
Standard Hours = 26400 + 4800 = 31200
7. Calculation of Standard Hours per unit of output:
Standard hours per unit of output = Standard hours Allowed / Actual output = 31200 /12000 = 2.6 Hours Per unit
Direct Material
Direct Labor
Standard price or rate per unit of input
$ 21.00
per pound
$ 13.00
per hour
Standard quantity per unit of output
3.7
pounds per unit
2.60
hours per unit
Actual quantity used per unit of output
3.95
pounds per unit
2.2
hours
Actual price or rate per unit of input
$ 19.00
per pound
$ 14.00
per hour
Actual output
12000
units
12000
units
Standard input quantity allowed
44400
pounds
31200
hours
Direct-material purchase price variance
$ 94,800.00
F
Direct-material quantity variance
$ 63,000.00
F
Direct-labor rate variance
$ 26,400.00
F
Direct-labor efficiency variance
$ 62,400.00
F
Total direct-labor variance
$ 36,000.00
F
Direct Material
Direct Labor
Standard price or rate per unit of input
$ 21.00
per pound
$ 13.00
per hour
Standard quantity per unit of output
3.7
pounds per unit
2.60
hours per unit
Actual quantity used per unit of output
3.95
pounds per unit
2.2
hours
Actual price or rate per unit of input
$ 19.00
per pound
$ 14.00
per hour
Actual output
12000
units
12000
units
Standard input quantity allowed
44400
pounds
31200
hours
Direct-material purchase price variance
$ 94,800.00
F
Direct-material quantity variance
$ 63,000.00
F
Direct-labor rate variance
$ 26,400.00
F
Direct-labor efficiency variance
$ 62,400.00
F
Total direct-labor variance
$ 36,000.00
F