Direct materials and direct labor variance analysis Oasis Faucet Company manufactures faucets in a small manufacturing facility. The faucets are made from zinc. Manufacturing has 50 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:
Standard wage per hr. $14.50
Standard labor time per faucet 12 min.
Standard number of lbs. of zinc 1.8 lbs.
Standard price per lb. of zinc $12.00
Actual price per lb. of zinc $11.75
Actual lbs. of zinc used during the week 15,100 lbs.
Number of faucets produced during the week 8,000
Actual wage per hr. $15.10
Actual hrs. per week 1,800 hrs.
Instructions
Determine (a) the standard cost per unit for direct materials and direct labor; (b) the price variance, quantity variance, and total direct materials cost variance; and (c) the rate variance, time variance, and total direct labor cost variance.