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# Flavor Rite Variance Calculations

The standards for one carton of Flavor Rite are:
Direct Materials 3.2lbs @ \$6.00/lb
Direct Labor 2.4 hrs. @\$10.00/hr.

During the week ended May 17, the following activity took place:
â?¢ 4,800 lbs. of raw material were purchased for inventory at a cost of \$5.60 per pound;
â?¢ 1,200 cartons of finished product were produced;
â?¢ 4,020 lbs. of raw material were used;
â?¢ 3,110 labor hours were worked at a total cost of \$26,435.

Calculate each of the following variances:
(a.) Raw materials purchase price variance.
(b.) Raw materials usage variance.
(c.) Direct labor rate variance.
(d.) Direct labor efficiency variance:

#### Solution Preview

See attached file for clarity.

Variance calculation

The standards for one carton of Flavor Rite are:
Direct Materials 3.2lbs @ \$6.00/lb
Direct Labor 2.4 hrs. @\$10.00/hr.

During the week ended May 17, the following activity took place:
â?¢ 4,800 lbs. of raw material were purchased for inventory at a cost of \$5.60 per pound;
â?¢ 1,200 cartons of finished product were produced;
â?¢ 4,020 lbs. of raw ...

#### Solution Summary

This solution is comprised of a detailed explanation to calculate each of the following variances:
(a.) Raw materials purchase price variance.
(b.) Raw materials usage variance.
(c.) Direct labor rate variance.
(d.) Direct labor efficiency variance.

\$2.19