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question materials and labor variances at the beginning of the year shults company h 4293699

Question

Materials and Labor Variances

At the beginning of the year, Shults Company had the following standard cost sheet for one of its plastic products:

The actual results for the year are as follows:

Units produced: 500,000.

Materials purchased: 3,500,000 pounds @ $5.25.

Materials used: 3,150,000 pounds.

Direct labor: 1,050,000 hours @ $13.44.

Required:

1. Compute price and usage variances for materials.

2. Compute the labor rate and labor efficiency variances.

Direct materials (6 lbs. @ $5)

$30.00

Direct labor (2 hrs. @ $12)

24.00

Standard prime cost per unit

$54.00

 

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