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Clark

Products manufactures faux boulders to be used in various landscaping applications. A special resin is used to make the boulders. The standard quantity of resin used for each boulder is

5

pounds.

Clark

Products uses a standard cost of

$2.00

per pound for the resin. The company produced

2,650

boulders in June. In that month,

12,500

pounds of resin were purchased at a total cost of

$26,000.

A total of

12,250

pounds were used in producing the boulders in June.Read the requirements

1.	Calculate the direct material price variance.
2.	Calculate the direct material quantity variance

.

Requirement 1. Calculate the direct material price variance.

Begin by determining the formula for the price variance, then compute the price variance for the direct materials. (Enter the variance as a positive number. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials)

		(		-		)	=	DM price variance
		(		-		)	=

Sharp

Oil performs oil changes. The standard wage rate for oil change technicians is

$10

per hour. By analyzing its past records of time spent on oil changes, the company has developed a standard of

21

minutes (or

0.35

hours) per oil change. In July,

1,100

oil changes were performed at

Sharp

Oil. Oil change technicians worked a total of

260

direct labor hours at an average rate of

$17

per hour.Read the requirements

LOADING...

.

Requirement 1. Calculate the direct labor rate variance.

Determine the formula for the rate variance, then compute the rate variance for the direct labor. (Enter the result as a positive number. Label the variance as favorable (F) or unfavorable (U). Enter the currency amount in the formula to the nearest cent, then round the final variance amount to the nearest whole dollar. Abbreviations used: DL = Direct labor.)

		(		-		)	=	DL rate variance
		(		-		)	=

1.	Calculate the direct labor rate variance.
2.	Calculate the direct labor efficiency variance.

Answer & Explanation Solved by verified expert

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