Compute the variances materials price net materials, Ask an Expert

Accounting

ABC inc. uses a standard cost system to account for its single product. Standards established for product comprise the following:
Materials ……………………..8lbs. @ $0.05/lb
Labor……………………………6hrs. @ $5.60/hr

The following operating data came from the records for the month:

In process, beginning inventory, none.

In process, ending inventory, 800 units, and 80% complete as to labor; material is issued at the beginning of processing.

Completed during the month, 5,600 units

Materials issued to production were 51,680 pounds @ $0.045 per pound.

Direct labor was $215,840 at a rate of $5.68 per hour.

problem 1) Compute the variances given below:

a. Net labor variance
b. Materials price
c. Net materials variance
d. Labor rate
e. Labor efficiency
f. Materials quantity

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M99697

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