Explore BrainMass
Share

# Cost Variance Analysis

(For the following, positive values are unfavorable variances and negative values are favorable variances)
Cost Standards for Product X:
Direct Material 3 pounds @ \$2.53 per pound \$7.59
Direct Labor 5 hours @ \$7.53 per hour 37.65

Units produced 7,795
Direct material purchased 26,000 pounds @ \$2.70 \$70,200.
Direct material used 23,100 pounds @ \$2.70 62,370.
Direct Labor 40,100 hours @ \$7.30 292,730.

A) The direct-material price variance is: ?
B) The direct-labor efficiency variance is: ?
C) The standard hours allowed for the work performed are: ?

#### Solution Preview

See the attached file.

Cost Variance Analysis
(For the following, positive values are unfavorable variances and negative values are favorable variances)
Cost Standards for Product X:
Direct Material 3 pounds @ \$2.53 per pound \$7.59 ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer what is the direct-material price variance, the direct-labor efficiency variance, and the standard hours allowed for the work performed.

\$2.19