Explore BrainMass

Explore BrainMass

    Direct material/labor variances

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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

    See attached file for complete problem
    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

    Required
    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.

    © BrainMass Inc. brainmass.com March 4, 2021, 5:55 pm ad1c9bdddf
    https://brainmass.com/business/labour-management-and-relations/direct-material-labor-variances-18357

    Attachments

    Solution Preview

    See attached file

    a. Direct-material price variance.

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

    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

    $2.49

    ADVERTISEMENT