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Direct material/labor variances

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Need help computing direct material price and quantity variances, and direct labor rate and efficiency variances.

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Adelphi Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex during July. The following information from the Stylex production department pertains to July:

Direct material purchased: 18,000 yards at $1.38 per yard $24,840
Direct material used: 9,500 yards at $1.38 per yard 13,110
Direct labor used: 2,100 hours at $9.15 per hour 19,215

The standard prime costs for one unit of Stylex are:

Direct material: 20 yards at $1.35 per yard $27
Direct labor: 4 hours at $9.00 per hour 36
Total standard prime cost per unit of output $63

Compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable.
a. Direct-material price variance.
b. Direct-material quantity variance.
c. Direct-labor rate variance.
d. Direct-labor efficiency variance.

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Solution Summary

The solution calculates a. Direct-material price variance , b. Direct-material quantity variance. c. Direct-labor rate variance, d. Direct-labor efficiency variance and indicates whether they are favorable or unfavorable

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a. Direct-material price variance.

Price variance = (Actual price -standard price)X Actual material= $285.00 =(1.38-1.35) *9500

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