Required information [The following information applies to the questions displayed below A manufactured product has the following information for June. Standard Direct materials Direct labor Overhead Units manufactured (6 bs. $8 per lb. ) 51,400 lbs. $8.10 per 1b. (3 hrs. e $16 per hr 25,200 hrs. $16.50 per hr. (3 hrs. e $12 per hr-) $313,000 8,500 (1) Compute the standard cost per unit. Direct materials Direct labor Overhead Total (2) Compute the total cost variance for June. Indicate whether the cost variance is favorable or unfavorable. Total cost variance
Answer 1. Standard Cost per Unit: Direct Material = 6 lbs X $8 = 48 Direct Labor = 3 hrs. X $16 = 48 Overhead = 3 hrs. X $12 = 36 Total Standard Cost per Unit 132 Answer 2. Total Cost Variance = Standard Cost - Actual Cost Total Standard Cost = $132 X 8,500 Units = 1,122,000 Total Actual Cost : Direct Material - 51,400 X $8.10 = 416,340.00 Direct Labor - 25,200 Hrs X $16.50 = 415,800.00 Overhead = 313,000.00 Total Actual Cost = 1,145,140.00 Total Cost Variance = $1,122,000 - $1,145,140 Total Cost Variance = $23,140 (U) Answer 3. Actual Cost Standard Cost AQ X AP AQ X SP SQ X SP 51,400 X 8 51,400 X 8 51,000 X 8 416,340 411,200 408,000 5,140 3,200 Direct Material Price Variance 5,140 (U) Direct Material Quantity Variance 3,200 (U) Total Direct Material Variance 8,340 (U) Answer 4. Actual Cost Standard Cost AH X AP AH X SP SH X SP 25,200 X 16.50 25,200 X 16 25,500 X 16 415,800 403,200 408,000 12,600 4,800 Direct Labor Rate Variance 12,600 (U) Direct Labor Efficiency Variance 4,800 (F) Total Direct Labor Variance 7,800 (U)
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