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# Variances in a Dress Manufacturing Operations

Dresses by Audrey Inc.
Audrey Inc. manufactures silk dresses in a small manufacturing facility. Manufacturing has 20 employees. Each employee presently provides 36 hours of productive labor per week. Information about a production week is as follows:

Standard wage per hour \$10.65
Standard labor time per dress 20 minutes
Standard number of yards of silk per dress 3.8 yards
Standard price per yard of silk \$2.75
Actual price per yard of silk \$2.80
Actual yards of silk used during the week 7,500 yards
Number of dresses produced during the week 2,100
Actual wage per hour \$10.80
Actual hours per week 720 hours

Instructions:
Determine (A) the standard cost per a dress for direct materials and direct labor, (B) the price variance, quantity variance, and total direct materials cost variance, and (C) the rate variance, and total direct labor cost variance.

#### Solution Preview

Part A

Standard cost per dress = Standard material cost + Standard labor cost = 3.8 * \$2.75 + (20/60) * \$10.65 = \$14.00 (\$10.45 in direct material and \$3.55 in direct labor)

Part B

Price variance = (Actual price - Standard price) * Actual quantity used = (\$2.80 - \$2.75) * 7,500 = \$375 (unfavorable)

Standard quantity for 2,100 ...

#### Solution Summary

This solution calculates the standard cost, price variance, quantity variance, total direct materials cost variance, rate variance and total direct labor cost variance for a dress manufacturing operation.

\$2.19