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Tuna Company: Compute the direct materials cost variance, including its price and quantity variances...

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1.
Direct material
Standard Cost 1,620,000 x 4.00 = 6480,000 less Actual Cost 1,615,000 x 4.10 = Cost Variance (unfavorable) 141,000
Price Variance = Standard Cost @ $4 less Actual Cost @ 4.10 = Price Variance $0.10 (Unfavorable)
Quantity Variance = Standard Quantity 1620,000 less Actual Quantity 1615,000 = Quantity Variance (favorable) 5,000.

2,
Direct Labor
Direct Labor Variance
Standard Cost 270,00 x 14 ...

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Compute the Direct Materials and Labor Cost Variances

24-1A: Tuna Company set the following standard unit costs for its single product.
Direct materials (25 lbs. @ $4 per lb) $100.00
Direct labor (6 hrs. @8 per hr.) 48.00
Factory overhead : variable (6 hrs. @ $5 per hr) 30.00
Factory overhead: fixed (6 hrs. @7 per hr) 42.00
Total standard costâ $220.00

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available.

Operating Levels
70% 80% 90%
Production in units 42,000 48,000 54,000
Standard direct labor hours 252,000 288,000 324,000
Budgeted overhead
Flexible factory overhead $2,016,000 $2,016,000 $2,016,000
Variable factory overhead $1,260,000 $1,440,000 $1,620,000

During the current quarter, the company operated at 70% of capacity and produced 42,000 units of product; actual direct labor totaled 250,000 hours. Unit produced were assigned the following standard costs:

Direct materials (1,050,000 lbs. @ $4 per lb) $4,200,000
Direct labor (252,000 hrs. @8 per hr) 2,016,000
Factory overhead (252,000 hrs. @ $12 per hr) 3,024,000
Total standard cost $9,240,000

Actual costs incurred during the current quarter follows:

Direct materials (1,000,000 lbs. @ $4.25) $4,250,000
Direct labor (250,000 hrs. @ 7.75) 1,937,500
Fixed factory overhead costs 1,960,000
Variable factory overhead costs 1,200,000
Total actual costs $9,347,500

Required

1. Compute the direct materials cost variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.

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