Gandolph Game Company has established the following standard

Gandolph Game Company has established the following standards for the prime costs of one unit of its chief product, dartboards Standard Price or Rate Standard Cost Standard Quantity Direct material Direct labor $26.60 14.00 kilograms $ 1.90 per kilogram 15.40 1.10 hour $14.00 per hour Total $42.00 During September, Gandolph purchased 411,000 kilograms of direct material at a total cost of $858,990 The total wages for September were $480,480, 90 percent of which were for direct labor. Gandolph manufactured 28,000 dartboards during September, using 383,600 kilograms of the direct material purchased in September and 33,600 direct-labor hours Required: Compute the following variances for September. (Do not round intermediate calculations. Indicate the effect of each variance by selecting \"Favorable\" or \"unfavorable\". Select \"None\" and enter\"0\" for no effect (i.e., zero variance).) 1.Direct-material price variance 2. Direct-material quantity variance 3. Direct-material purchase price variance 4. Direct-labor rate variance 5. Direct-labor efficiency variance

Solution

Direct material price = 858990/411000= $2.09 Direct material price variance = 383600*(2.09-1.9)= $72884 U Direct material quantity variance = 1.9*(383600-28000*14)= $15960 F Direct material purchase price variance = 411000*(2.09-1.9)= $78090 U Direct labor wages = 480480*90%= $432432 Direct labor rate variance = 432432-(33600*14)= $37968 F Direct labor efficiency variance =14*(33600-28000*1.1)= $39200 U