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The following data relate to direct materials costs for February: ??Materials cost per yard: standard, $2
The following data relate to direct materials costs for February:
??Materials cost per yard: standard, $2.00; actual, $2.10
Standard yards per unit: standard, 4.5 yards; actual, 4.75 yards
Units of production: 9,500
?Calculate the total direct materials cost variance.
The following data relate to direct labor costs for March:
Rate: standard, $12.00; actual, $12.25
Hours: standard, 18,500; actual, 17,955
Units of production: 9,450
Calculate the direct labor rate variance.
Expert Solution
Computation of the direct materials cost variance:-
Total direct materials cost variance = Actual cost - Standard cost
= (9,500 * 4.75 * $2.10) - (9,500 * 4.50 * $2.00)
= $94,762.50 - $85,500
= $9,262.50 (U)
The total direct material cost variance is unfavorable because actual cost is higher than the standard cost.
Computation of the direct labor rate variance:-
Direct labor rate variance = (Actual rate - Standard rate) * Actual hours worked
= ($12.25 - $12) * 17,955
= $0.25 * 17,955
= $4,488.75 (U)
The direct labor rate variance is unfavorable because actual rate is higher than the standard rate.
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