Great Fender, which uses a standard cost accounting
system, manufactured 20,000 boat fenders during 2014
E23-19 Calculating materials and labor variances
E23-19 Great Fender, which uses a standard cost
accounting system, manufactured 20,000 boat fenders during 2014, using 144,000
square feet of extruded vinyl purchased at $1.05 per square foot. Production
required 420 direct labor hours that cost $13.50 per hour. The direct materials
standard was 7 square feet of vinyl per fender, at a standard cost of $1.10 per
square foot. The labor standard was 0.025 direct labor hour per fender, at a
standard cost of $12.50 per hour.
Compute the cost and efficiency variances for
direct materials and direct labor.
TUTORIAL PREVIEW
Price
Variance = (Actual price per unit – Standard price per unit) x Actual quantity
of input
Direct
material price variance = ($1.05 / Sf2 - $1.10 / Sf2) x
144,000 ft
= $7,200 F
File name: E23-19 Great Fender.xls File type: .xls PRICE: $12
