Direct manufacturing labor and direct materials variances, missing data. (CMA heavily adapted).
Response to the following problem:
More Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct materials and direct manufacturing labor is $100 per board. This includes 20 pounds of direct materials, at the budgeted price of $2 per pound, and five hours of direct manufacturing labor, at the budgeted rate of $12 per hour. Following are additional data for the month of July:
Units completed 6,000 units
Direct material purchases 150,000 pounds
Cost of direct material purchases $292,500
Actual direct manufacturing labor-hours 32,000 hours
Actual direct-labor cost $368,000
Direct materials efficiency variance $ 12,500 U
There were no beginning inventories.
1. Compute direct manufacturing labor variances for July.
2. Compute the actual pounds of direct materials used in production in July.
3. Calculate the actual price per pound of direct materials purchased.
4. Calculate the direct materials price variance.