Yoksa Mezun muyum Corporation manufactures lamps. It has set up the following standards per finished unit for direct

Question

Yoksa Mezun muyum Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing labor. Direct Materials : 10 gr. at $4.50 per gr. $ 45.00 Direct Labor : 0.5 hour at $30 per hour $ 15.00 The number of finished units budgeted for January 2019 was 10,000; 9,850 units were actually produced. Actual results in January 2019 were: Direct Materials : 98,055 gr. used Direct Labor : 4,900 hours $ 154,350 Assume that there was no beginning inventory of either direct materials or finished units. During the month, materials purchases amounted to 100 kg. at a total cost of $465,000. Compute the January 2019 price and efficiency variances of direct materials and direct labor (20 pts) Comment on the January 2019 price and efficiency variances. (10 pts)

Help In Homework · Accepted Answer

a Direct Material Price Variance = (Actual Price - Standard Price) * Actual Quantity = ($4.65 - $4.50) * 100,000 gr. = $15,000 Unfavorable Direct Material quantity Variance = (Actual Quantity - Standard Quantity) * Standard Rate = (98,055 - 98,500) * $4.50 = $2,003 Favorable Direct labor price variance = (Actual Rate - Standard Rate) * Actual hours = ($31.50 per hr. - $30.00 per hr.] * 4,900 hours = $7,350 Unfavorable Direct labor quantity variance = (Actual hours - Standard hours) * Standard Rate = (4,900 - 4,925) * $30.00 = $750 Favorable 3 Based on price variance, standard materials used and efficient use of direct labor which led to unfavorable price variance and efficiency variances are favorable because of high quality and efficient labor

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Yoksa Mezun muyum Corporation manufactures lamps

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a	Direct Material Price Variance =	(Actual Price - Standard Price) * Actual Quantity
	=	($4.65 - $4.50) * 100,000 gr.
	=	$15,000	Unfavorable

	Direct Material quantity Variance =	(Actual Quantity - Standard Quantity) * Standard Rate
	=	(98,055 - 98,500) * $4.50
	=	$2,003	Favorable

	Direct labor price variance =	(Actual Rate - Standard Rate) * Actual hours
	=	($31.50 per hr. - $30.00 per hr.] * 4,900 hours
	=	$7,350	Unfavorable

	Direct labor quantity variance =	(Actual hours - Standard hours) * Standard Rate
	=	(4,900 - 4,925) * $30.00
	=	$750	Favorable


3	Based on price variance, standard materials used and efficient use of direct labor which led to unfavorable
	price variance and efficiency variances are favorable because of high quality and efficient labor