Animent Industries, Inc. (AII), developed standard costs for direct material and direct labor. In 2016, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.10 pounds $60 per pound
Direct labor 0.05 hours $30 per hour
During June, AII produced and sold 20,000 containers using 1,900 pounds of direct materials at an average cost per pound of $64 and 1,000 direct manufacturing labor-hours at an average wage of $30.50 per hour.
June's direct material flexible-budget variance is ________.
$1,600 unfavorable
$7,200 unfavorable
$500 favorable
$600 favorable
Animent Industries, Inc. (AII), developed standard costs for direct material and direct labor. In 2016, AII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.10 pounds $60 per pound
Direct labor 0.05 hours $30 per hour
During June, AII produced and sold 20,000 containers using 1,900 pounds of direct materials at an average cost per pound of $64 and 1,000 direct manufacturing labor-hours at an average wage of $30.50 per hour.
June's direct material flexible-budget variance is ________.
| $1,600 unfavorable | ||
| $7,200 unfavorable | ||
| $500 favorable | ||
| $600 favorable |
Related questions
Costello Corporation manufactures a single product. The standardcost per unit of product is shown below.
Direct materialsâ2 pound plastic at $6.89 per pound | $ 13.78 | |
Direct laborâ2.00 hours at $11.00 per hour | 22.00 | |
Variable manufacturing overhead | 14.00 | |
Fixed manufacturing overhead | 10.00 | |
Total standard cost per unit | $59.78 |
The predetermined manufacturing overhead rate is $12 per directlabor hour ($24.00 ÷ 2.00). It was computed from a mastermanufacturing overhead budget based on normal production of 11,800direct labor hours (5,900 units) for the month. The master budgetshowed total variable costs of $82,600 ($7.00 per hour) and totalfixed overhead costs of $59,000 ($5.00 per hour). Actual costs forOctober in producing 3,500 units were as follows.
Direct materials (7,180 pounds) | $ 50,475 | |
Direct labor (6,860 hours) | 77,381 | |
Variable overhead | 61,738 | |
Fixed overhead | 24,472 | |
Total manufacturing costs | $214,066 |
The purchasing department buys the quantities of raw materials thatare expected to be used in production each month. Raw materialsinventories, therefore, can be ignored.
(a) Compute all of the materials and laborvariances. (Round answers to 0 decimal places, e.g.125.)
Total materials variance | $ | UnfavorableFavorableNeither favorable nor unfavorable | ||
Materials price variance | $ | Neither favorable nor unfavorableFavorableUnfavorable | ||
Materials quantity variance | $ | FavorableUnfavorableNeither favorable nor unfavorable | ||
Total labor variance | $ | UnfavorableFavorableNeither favorable nor unfavorable | ||
Labor price variance | $ | UnfavorableNeither favorable nor unfavorableFavorable | ||
Labor quantity variance | $ | FavorableUnfavorableNeither favorable nor unfavorable |
(b) Compute the total overhead variance.
Total overhead variance | $ | FavorableNeither favorable nor unfavorableUnfavorable |
