A company uses the following standard costs to produce a single unit of output. ...
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Accounting
A company uses the following standard costs to produce a single unit of output.
| Direct materials | 6 pounds at $0.90 per pound = | $ 5.40 |
|---|---|---|
| Direct labor | 0.2 hour at $10.00 per hour | 2.00 |
| Manufacturing overhead | 0.2 hour at $3.70 per hour | 0.74 |
During the latest month, the company purchased and used 56,000 pounds of direct materials at a price of $1.20 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $16,340 based on 1,720 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $3,400 and fixed manufacturing overhead incurred was $14,000. Based on this information, the total direct labor variance for the month was:
Multiple Choice
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$3,660 favorable
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$2,800 unfavorable
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$860 unfavorable
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$860 favorable
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$2,800 favorable
A company provided the following direct materials cost information. Compute the total direct materials variance.
| Standard costs assigned: | |
|---|---|
| Direct materials standard cost (415,000 units @ $4.00/unit) | $ 1,660,000 |
| Actual costs: | |
| Direct materials costs incurred (413,750 units @ $4.20/unit) | $ 1,737,750 |
Multiple Choice
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$82,750 Favorable.
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$82,750 Unfavorable.
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$5,000 Favorable.
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$77,750 Favorable.
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$77,750 Unfavorable.
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