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    Sanders Industries, Inc.

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    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.

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    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.

    $2.49

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