Answer:
Instructions are below.
Explanation:
Giving the following information:
Production= 7,800 units
Direct labor 40,200 hr. at $14.60
Direct material purchased 30,000 lb. at $3.00
Direct material used 22,100 lb.
The control valve has the following standard prime costs.
Direct material: 3 lb. at $2.90 per lb. $ 8.70
Direct labor: 5 hr. at $15.10 per hr. 75.50
Standard prime cost per unit $ 84.20
1) Standard production costs:
Direct material= 8.7*7,800= 67,860
Direct labor= 75.5*7,800= 588,900
Total porduction cost= $656,760
2<u>) We need to use the following formulas to calculate the direct material and direct labor variances:</u>
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (2.9 - 3)*30,000
Direct material price variance= $3,000 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (3*7,800 - 22,100)*15.1
Direct material quantity variance= (23,400 - 22,100)*2.9
Direct material quantity variance= $3,770 favorable
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (5*7,800 - 40,200)*15.1
Direct labor time (efficiency) variance= $18,120 unfavorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (15.1 - 14.6)*40,200
Direct labor rate variance= $20,100 favorable
