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  • 52 -Trần Khánh Vy - Written quiz

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    Trần Khánh Vy
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    There were variances in direct material and direct labor costs. For direct materials, there was an unfavorable price variance of $8,000 and a favorable quantity variance of $9,000, resulting in an overall favorable total variance of $1,000. For direct labor, there was an unfavorable rate variance of $7,500 and a favorable efficiency variance of $8,500, also resulting in an overall favorable total variance of $1,000. Possible causes included differences between actual and standard prices for direct materials and factors affecting labor efficiency such as skill levels or production methods.

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    There were variances in direct material and direct labor costs. For direct materials, there was an unfavorable price variance of $8,000 and a favorable quantity variance of $9,000, resulting in an overall favorable total variance of $1,000. For direct labor, there was an unfavorable rate variance of $7,500 and a favorable efficiency variance of $8,500, also resulting in an overall favorable total variance of $1,000. Possible causes included differences between actual and standard prices for direct materials and factors affecting labor efficiency such as skill levels or production methods.

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    10 views2 pages

    52 -Trần Khánh Vy - Written quiz

    Uploaded by

    Trần Khánh Vy
    There were variances in direct material and direct labor costs. For direct materials, there was an unfavorable price variance of $8,000 and a favorable quantity variance of $9,000, resulting in an overall favorable total variance of $1,000. For direct labor, there was an unfavorable rate variance of $7,500 and a favorable efficiency variance of $8,500, also resulting in an overall favorable total variance of $1,000. Possible causes included differences between actual and standard prices for direct materials and factors affecting labor efficiency such as skill levels or production methods.

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    of 2

    1.

    a. Direct Material price Variance -8000 (F) =136,000 - 144,000


    Actual cost 136,000 =8000*17
    (minus) FB cost at actual activities 144,000 =8000*18

    b. Direct Material quantity Variance 9,000 (U) = 126,000 - 177,000


    FB cost at actual activities 126,000 =7000*18
    (minus) Standard cost 117,000 =6.5*1000*18

    Total Direct material variance 1000 (U)

    c. Direct Labor rate Variance -7500 (F) =120,000 - 127,500


    Actual cost 120,000 =15000*8
    (minus) FB at actual activities 127,500 =15000*8.5

    d. Direct labor efficiency Variance 8,500 (U) =127,500 - 119,000


    FB cost at actual activities 127,500 =15000*8.5
    (minus) Standard cost 119,000 =14*1000*8.5

    Total DL variance 1000 (U)

    2.

    One possible cause for the variances mentioned in question 1 could be


    the difference in the actual prices of direct materials purchased compared
    to their standard prices. This could also be attributed to fluctuations in the
    market prices and negotiation abilities. Additionally, the direct labor
    efficiency variance could be influenced by factors like skill levels of the
    labor force, training, production methods, or changes in the production
    process leading to higher efficiency.
    0 - 144,000

    00 - 177,000

    0 - 127,500

    0 - 119,000

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