EUROPEAN STYLES, INC.

Standard Cost of Production

For November
Total
Standard Cost Standard
Lot Number Boxes in Lot per Box Cost
22 1000 $ 106.50 $ 106.50
23 1700 $ 106.50 $ 181.05
24 1200 $ 90.48 $ 108.58
Standard cost of production $ 396.126

Direct Labor Standard Cost $ 44.10

Add: Manufacturing Overhead $ 36.00
Production Percentage 80%
Add: Direct Material $ 26.40
Lot 24 Standard cost per box $ 90.48

EUROPEAN STYLES, INC.

Direct-Material Purchase Price Variance
For November
Actual cost of materials purchased $ 106,400
Standard cost of materials purchased 104,500
Direct-material purchase price variance $ 1,900

EUROPEAN STYLES, INC.

Direct-material quantity variance
For November
Direct material Quantity Variances Lot 22 Lot 23 Lot 24
Boxes in Lot 1,000 1,700 1,200
Standard yards per box $ 24 $ 24 $ 24
Total Standards Quantity 24,000 40,800 28,800
Actual Yards 24,100 40,440 28,825
Total Variance in Yards 100 - 360 25
Standard Price $ 1.10 $ 1.10 $ 1.10
Direct Material Quantity Variances $ 110 -$ 396 $ 27.5
Unfavorable favorable Unfavorable

EUROPEAN STYLES, INC.

Direct-labor efficiency variance
For November
Direct-labor efficiency variance Lot 22 Lot 23 Lot 24
Standard Hours :
Boxes in Lot 1,000 1,700 1,200
Standard hours per box $ 3 $ 3 $ 3
Total 3,000 5,100 3,600
Percentage of completion 100% 100% 80%
Total Standard Hours 3,000 5,100 2,880
Actual hours worked 2980 5130 2890
Variance in Hours - 20 30 10
Standard rate $ 14.70 $ 14.70 $ 14.70
Direct Labor Efficiency Variances -$ 294 $ 441 $ 147
favorable Unfavorable Unfavorable

EUROPEAN STYLES, INC.

Direct-labor rate variance
For November
Direct-labor rate variance : Lot 22 Lot 23 Lot 24
Actual Hours Worked 2,980 5,130 2,890
Rate paid in excess standard $ 0.30 $ 0.30 $ 0.30
Variance $ 894 $ 1,539 $ 867
Unfavorable Unfavorable Unfavorable

Production employees $15.00

Standard Direct labor per hour 14.70
Rate paid in excess standard $ 0.30

Raw Material $ 104,500

Direct material price variance $ 1,900
Accounts Payable $ 106,400
* Raw Material : 95.000 x $1.10 = $ 104,500

Direct labor rate variance $ 3,300

Wages payable $ 3,300

Work in Process $ 102,960

Direct Material quantity variance $ 259
Raw Materia $ 102,702
* Work in Process : 93.600 x $1.10 = $102.960

Work in process $ 161,406

Direct labor rate variance $ 294
Direct Labor Efficiency Variances $ 3,300
Wages Payable $ 165,000

* Work in Process : 10,980 x $14,70 = $161,406

Raw-Material Inventory 72,000

Direct-Material Price Variance 3,000
Accounts Payable 75,000

To record purchase of veneered wood

Raw-Material Inventory 9,000
Accounts Payable 9,000

To record purchase of bridges and strings

Work-in-Process Inventory 48,000
Direct-Material Quantity Variance 6,000
Raw-material Inventory 54,000

To record usage of veneered wood

Work-in-Process Inventory 7,500
Raw-Material Inventory 7,500

To record usage of bridges and strings

Work-in-Process Inventory 60,000
Direct-Labor Rate Variance 2,850
Direct-Labor Efficiency Variance 3,000
Wages Payable 54,150

To record Construction Department direct-labor costs and variances

Work-in-Process Inventory 22,500
Direct-Labor Rate Variance 1,570
Direct-Labor Efficiency Variance 1,050
Wages Payable 25,120

Finished-Goods Inventory 138,000

Work-in-Process Inventory 138,000

Accounts Receivable 120,000

Sales Revenue 120,000
Cost of Goods Sold 82,800
Finished-Goods Inventory 82,800

Cost of Goods Sold 5,770

Direct-Labor Rate Variance 1,280
Direct-Labor Efficiency Variance 1,950
Direct-Material Price Variance 3,000
Direct-Material Quantity Variance 6,000
 Total
3,900
$ 24
93,600
93,365
- 235
$ 1.10
-$ 258.5
favorable
 Total

10,980
11,000
20
$ 14.70
$ 294
Unfavorable

Total
11,000
$ 0.30
$ 3,300
Unfavorable