Parkchester Co. manufactures recyclable beer cans. A unit of
production is a case of 12 dozen cans. The following standards have
been set by the production-engineering staff and the controller.
Direct material:
Quantity: 4 kilograms
Price $.79 per kilogram
Direct labor:
Quantity: .25 hour
Rate: $16 per hour
Actual material purchases amounted to 240,000 kilograms at $.81 per
kilogram. Actual costs incurred in the production of 50,000 units
follow:
Direct labor - $211,900 for 13,000 hours
Direct material - $170,100 for 210,000 kilograms
Required:
Use the variance formulas to compute the direct-material price and
quantity variances and the direct-labor rate and efficiency variances.
Indicate whether each variance is favorable or unfavorable. |
