Calibri Body At the beginning of the year Shults Company had

Calibri (Body At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products: Direct materials (5 kg @ $4.00) Direct labour (2 hrs. $11.25) Standard prime cost per unit The actual results for the year are as follows: a. Units produced: 175,000 b. Materials purchased: 930,000 kilograms @$4.10 c. Materials used: 925,000 kilograms d. Direct labour: 362,500 hours @ $11.15 The material price variance is $ The material usage variance is $ . This variance is (F/U) The total labour variance is $ The labour rate/price variance is $ The labour efficiency variance is $ . This variance is (F/U) s___ _ This variance is (F/U) . This variance is (F/U) s__ _. This variance is (F/U)

Solution

Material price variance = AQ purchased * (AP-SP) =930000*(4.10 - 4.00) = 93000 U

Material usage variance = SP * (AQ used-SQ)

=4.00*(925000-(175000*5)) = 200000 U

Total material variance = material price variance + material usage variance = 93000 U + 200000 U = 293000 U

Labor rate variance = AH *(AR - SR) =362500*(11.15-11.25) =-36250 =36250 F

Labor efficiency variance = SR*(AH - SH) = 11.25*(362500-(175000*2)) = 140625 U

Total labor variance = 36250 F + 140625 U = 104375 U

Therefore,

The material price variance is $93000. The Variance is U

The material usage variance is $200000. The variance is U

The total labor variance is $104375. The variance is U

The labor rate variance is $36250. The variance is F

The labor efficiency variance is $140625. The variance is U.