Problem concerning "Bayou Resins Company". Please help with this problem.
(Complete problem found in attachment)© BrainMass Inc. brainmass.com June 3, 2020, 6:02 pm ad1c9bdddf
a) Direct Materials
Price Variance= Standard Price $3.40 less Actual Price $3.50 = Unfavorable Price variance $0.10
Quantity Variance = Standard Quantity 6000 less Actual Quantity 5930 = Favorable Quantity variance 70 pounds.
Direct Materials Cost Variance:
Standard Cost $6000 x $3.40 = $20,400 less Actual Cost $5930 x $3.50 = 20,755 gives us Unfavorable Direct Materials Cost variance of $355.
b) Direct Labor
Rate Variance = Standard rate $18.00 less Actual Rate $18.50 = Unfavorable Rate variance $0.50.
Time Variance = ...
This solution provides steps necessary to evaluate performance using variances from standard costs.