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Homework 12: Direct cost variances #1 Plant, LLC manufactures stone planters

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Homework 12: Direct cost variances

#1 Plant, LLC manufactures stone planters. The below information provides information for the

Outdoor Stone planter for the month of November. All direct materials purchased were used in

production (Direct Materials inventory did not change).

Volume (units of Outdoor Stone planter)

Sales

Manufacturing costs (in $):

Direct materials

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead

Master Budget

70,000

$1,260,000

420,000

455,000

147,000

80,000

Net operating income

158,000

Actual Results

90,000 $1,530,000 556,875

729,000 146,250 85,000 12,875

  Additional information

Standards:

Wage Rate

$2.00 $13.00

247,500 $2.25 $13.50

Price per pound of DM

Direct Labor Rate

Actual:

Direct material quantity used

Price per pound of DM

  1) What are the standard and actual quantity of materials per planter? What are the standard and

actual direct labor hours per planter? (2 points)

2) Calculate the direct materials price and efficiency variances. Specify whether variances are

favorable or unfavorable. (4 points)

3) Calculate the direct labor rate and efficiency variances. Specify whether variances are