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Sanders Industries, Inc.

Sanders Industries, Inc., developed the following standard costs for direct material and direct labor for one of their major products, the 30-gallon heavy-duty plastic container.
Standard quantity Standard price
Direct materials 0.20 pounds $25 per pound
Direct labor 0.10 hours $15 per hour

During July, Sanders produced and sold 10,000 containers using 2,200 pounds of direct materials at an average cost per pound of $24 and 1,050 direct labor hours at an average wage of $14.75 per hour.

1.Determine what is July's direct labor efficiency variance.
2.Determine what is July's direct labor rate variance.
3.Determine July's direct labor planning variance.

Solution Preview

Sanders Industries, Inc. developed the following standard costs for direct material and direct labor for one of their major products, the 30-gallon heavy-duty plastic container.
Standard quantity Standard price
Direct materials 0.20 pounds $25 per pound
Direct labor 0.10 hours $15 per hour

During July, Sanders produced and sold 10,000 ...

Solution Summary

This solution is comprised of a detailed explanation to determine what is July's direct labor efficiency variance, what is July's direct labor rate variance, and July's direct labor planning variance.

$2.19